By on January 12, 2007

chevyvoltepa03222.jpgLast spring, reporters forced GM CEO Rabid Rick Wagoner to confront his company’s demons. At the opening of a Russian assembly plant, in the midst of US plant closures, sell-offs and buyouts; scribes raised the unholy specter of Toyota’s usurpation of GM’s “World’s Largest Automaker” crown. Wagoner told the assembled throng that GM would “like to stay number one” but it wasn’t the company’s "top priority.” New Year, new tune: "I like being number one,” Wagoner told Detroit auto show survivors. “I think our people take pride in it."

So Rick likes being number one. God knows he’s good at it; hanging onto power despite losing billions of dollars and overseeing a precipitous decline in the automaker's market share. And it's reassuring to hear that he “thinks” his people take pride in GM’s mantle (Vince Lombardi’s got nothing on Rick).

But RR's optimism couldn't counteract the bad news at yesterday’s automotive analyst hand-holding session. The beancounters had counted beans and concluded that the General's cash flow will remain negative this year– despite stripping out billions of dollars in fixed costs and plans to jettison sell even more of their remaining assets (e.g. $265m for GM's Arizona proving grounds).

Chief Financial Officer Fritz Henderson attributed some of the company’s predicted cash burn to a $1b increase in capital spending. The extra cash will pay for ongoing transmission upgrades (from four to six-speeds) and foreign expansion.

When pressed on the effect of this increased outlay on the company’s liquidity, Henderson said the company could take the hit, but admitted that GM’s cash flow was 'not anywhere near an adequate position’ (which is a bit like saying a person who’s lost is not as well-oriented as they could be). Equally ominously, Henderson spoke of “serious financial pressure” throughout ’07.

After this downbeat conclave, Rabid Rick launched yet another charm offensive. Schmoozing with Fortune Senior Editor Alex Taylor III, Rick revealed the home team’s latest defense: stop nickel and diming us! “People ask when is the business profitable and our objectives have to be much bigger than that. It is not an issue of can you make a nickel – that doesn't do anything for anybody. We need to get good profit and then it is very important that we generate good cash flow.” So now we know: making a nickel isn't much better than losing $10.6b.

Meanwhile, GM’s product mix continues its troubled evolution. While all eyes were on the plug-in Chevrolet Volt concept car, The Next Big Thing (Malibaura?) and the blingier Cadillac CTS, Henderson confirmed our suspicions that the the forthcoming US-spec Astra won't earn GM a single one of those not-so-precious nickels.

An unfavorable dollar – Euro exchange rate and European labor and transportation costs preclude the possibility of profit. Apparently, the Astra is merely a "bridge" product for Saturn, a temporary replacement for the Ion designed to "prove" Saturn’s new Euro-style handling/performance gestalt. Huh.

At the same time, Henderson said that GM’s recent sale of controlling interest in its GMAC finance unit was critical to lowering the subvention cost to GM. Translation: GM will probably use aggressive leasing tactics in the future– especially if it can boost residuals through lower rental fleet sales.

Of all its downsizing moves, the reduction in GM’s fleet sales is, perhaps, the most telling. It’s a sure sign that GM is fully committed to becoming a vastly smaller enterprise than it was at the beginning of Wagoner’s tenure. It’s a tacit admission that the company can no longer rely on sheer volume to make its crust. 

In fact, it's increasingly clear that GM has a new, Delphinian survival strategy: stabilize the US market (at whatever percentage) and expand abroad. Even as it stands, GM sells more cars abroad than it does in the United States. Buick is dead here, thriving in China. GM is tightening its belt stateside, preparing to bid for Malaysia's Proton.

At this point, all Rabid Rick wants to do is stop the arterial spray on his home turf. That’s why he was so sanguine about Toyota’s rise back in June. He was breaking ground on the company’s best bet for survival: Russia, India and China.

Rick’s “bigger” vision could work– if GM has enough time. While GM may make some progress towards a healthier revenue stream in '07 with a better product mix and reduced incentives, the real gains will continue to be made on the cost side. And that’s just not good enough. GM’s weak balance sheet makes it highly vulnerable to setbacks and shocks, which are on their way.

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107 Comments on “General Motors Death Watch 106: GM Unplugged...”


  • avatar
    audimination

    Why don’t we start some sort of Toyota Ethics Watch, where we talk about all the blatant ethical boundaries that Toyota breaks on a regular basis? articles like “Toyota Ethics Watch 1: Toyota lies about MPG rating” and “Toyota Ethics Watch 2: Toyota has more cars recalled than sold in 2006, but still claims to be most reliable” etc. etc. etc.

    I know GM and Ford are in trouble, but they are making a genuine effort to fix things (don’t know if I can say the same for Chrysler). Let’s support GM and Ford, after all, let’s not forget, they are the ones who really allowed for the car industry to exist as it does today.

    Keep in mind, I say all of this being French, and driving exclusively German.

  • avatar

    audimination:

    You are invited to submit an 800-word editorial on any topic you choose, subject to the same editorial constraints as all our writers.

    Please email it to: [email protected]

  • avatar
    oboylepr

    Let’s support GM and Ford, after all, let’s not forget, they are the ones who really allowed for the car industry to exist as it does today. If they had not done it, someone else would have. Aside from wishing them well (or mailing a cheque to them!), the only way to support them is to buy one of their cars. A lot of people are not ready to do that preferring other makes that they can feel sure about quality-and-reliability-wise. GM relies heavily on loyalists who believe that if it does not have a Chevy badge (or Pontiac, Buick etc) it's not a car! Living in the Oshawa, Ontario area I see GM products in vast numbers, easily outnumbering all other makes. You can put that down to employee sales and rightly so. But, as soon as you head west to Greater Toronto, GM's true market share shows clearly. There are many people who have been burned by GM in the 80's and 90's and I am one of them. I have only owned 2 GM vehicles, and Olds Cutlass & a GMC Safari. Every few weeks I was putting new parts into them and in fact I nearly paid for the Safari twice over it's lifetime. Tell me why I should support them please?

  • avatar

    So now we know: making a nickel isn’t much better than losing $10.6b.

    I’d much rather see them lose billions to invest in product development than to break even and let the product contine to stagnate.

  • avatar

    z31:

    False option set.

    Toyota, Honda, Nissan, Hyundai, etc. all invest in their future AND make a profit.

  • avatar
    NICKNICK

    audimination–
    I can’t seem to locate an article about a particular GM recall–or lack of it. My uncle is a GM goodwrench mechanic, and years ago there were many complaints about S-10/sonoma front end alignments. Rather than issue a recall on the ball joints, GM widened the alignment tolerance enough that the vehicles would stay within tolerance until the warranty expired. How’s that for ethics?
    I’d rather buy a vehicle from a company that obsessively recalls everything and admits problems than one from a company that sells a pile of poo and sweeps problems under the rug.

    As for the article, it seems that GM and Wagoner are getting some criticism for shrinking. I think this is the right thing to do–there are only so many people on earth, and cars last longer than they used to. Fewer new cars will be sold, so it’s best to “right size.”

  • avatar
    1984

    I’m not sure why you would fault RW for stating that #1 was not a priority. What would have been the alternative? “GM is #1 and it will stay that way cuz I say so?”.

    Also, you have said many times that “you can’t cut your way to profitability”. In essence the “nickel and dime” profit will not do… and I have to agree with that statement. Cutting cost and re-investing in technology and production methods is the correct decision for the long run.

  • avatar

    1984: Parse this: "If we are sitting here next year and I've lost, I'm not going to like that. [But] we're not giving this thing up just because somebody got a calculator for Christmas and punched in the numbers. This is going to be a dog fight. We're going to give up sales that don't make money, so we are not going to act like a company that is going to be drunk and disorderly. But it doesn't mean we have to lose the game because of one player. One year does not a battle make. If we lose, we lose, but we're going to keep fighting them." Now imagine you work for GM, and you heard Rick say "fuhgeddaboutit" in Russia.

  • avatar
    BostonTeaParty

    Why is that though RF, no legacy costs/commitments in the US?

  • avatar
    1984

    False option set.

    Toyota, Honda, Nissan, Hyundai, etc. all invest in their future AND make a profit.

    Any suggestions how to make money without spending it? I would like to know if you where RW how would you make that possible.

    The cars will not morph into something else without development cash.

  • avatar

    1984: Obviously, GM needs to invest in new products. The problem here in NA is that there are just too damn many of them. AND GM continues to lag behind the transplants' development cycle. GM needs to make deep structural change in the way it does business. There's just too much waste, fraud, inefficiency and bureacracy. Can they do it without filing for bankruptcy? I doubt it. In some ways, I feel sorry for Rick. He inherited a broken business model. He's cut and pasted as best he can, but he's done nothing to change the fundamentals.  

  • avatar
    Alex Rashev

    Well, there are companies spending billions on developing something that somebody else would develop in a few months and a few million dollars’ worth of costs. You can’t just throw money at your R&D department and expect a linear return.

  • avatar
    1984

    NICKNICK

    I was a mechanic in that time frame… The S/T truck ball joints where in fact recalled. Ball joints will not change the “alignment”.

  • avatar
    audimination

    NICKNICK

    One thing to consider about Toyota’s recalls is that they are pretty sneaky about how they go about it. They don’t do official “recalls” like most companies. They’ll throw out a little “service bulletin” which is basically trying to get the Toyota owners to bring their cars in for repairs without making an official recall that will go public. That’s pretty sneaky, don’t you think?

    oboylepr

    I agree that the domestics have fallen behind. And I agree with your point that supporting them means buying their cars, and people just aren’t ready to take that risk just yet. I’m the perfect example. I want the domestics to do well, but I wouldn’t buy a domestic for a long time to come because it’s just not worth the risk of leaving Audi…

    Robert:

    I’d love to write an editorial. I’ll actually work on one and hopefully it’ll be something remotely relevant that’s publisheable…

  • avatar
    Engineer

    So Rick likes being number one. God knows he’s good at it; hanging onto power despite losing billions of dollars and overseeing a precipitous decline in the automaker’s market share.
    [And still getting top dollar for the effort!] This is the amazing part: giving hope to incompetent employees everywhere. Your job performance has nothing to do with your continued employment, if you can do what Rick does.

    Perhaps RF can devout an article to the DW series entitled “Succeeding through abject failure”. Could serve as a blueprint for incompetents everywhere. The Peter principle at its apex.

  • avatar
    chainyanker

    1984:
    I was a mechanic in that time frame… The S/T truck ball joints where in fact recalled. Ball joints will not change the “alignment”.

    From:

    http://www.michelinman.com/care/tip3.html
    “How Wheels Are Aligned
    Alignment involves adjusting the angles of the wheels so that they are parallel to each other and perpendicular to the ground. The three main adjustments made in alignment are Camber, Caster, and Toe.”

    I’m not a pro mechanic but I’m pretty sure ball joints have a lot to do with that. Unless you’ve got a different defenition of ‘alignment’. Just sayin’.

  • avatar
    Geotpf

    audimination: No, that's not sneaky. If it's a safety related thing, an actual recall has to occur. Basically, Toyota makes thier "secret warranties" public-which is a good thing, ladies and gentlemen. And regarding MPG ratings-Toyota vehicles get the stated ratings if one drives them like the Federal test says to do so. In fact, it is illegal for Toyota to use any other MPG rating other the EPA government ones, even if they wanted to. Blame the Feds, not Toyota.

  • avatar
    Gardiner Westbound

    The Chevrolet Volt is dependent on taxpayers ponying up $500-million for research. No money, no juice, no Volt.

  • avatar
    jazbo123

    I’m not a pro mechanic but I’m pretty sure ball joints have a lot to do with that. Unless you’ve got a different defenition of ‘alignment’. Just sayin’.

    The ball joints themselves are fixed, not adjustable. They can be part of of an assembly that has a threaded rod for adjustment, but loose tolerances in the ball-socket would affect the slop in the steering not the alignment to any great degree.

  • avatar
    1984

    The ball joint does not have an adjustment for any of the things you have stated. At the point a ball joint would affect the vehicles alignment it would make a horrible noise and would be only a few miles from complete failure. You can’t mask a failed/failing ball joint with an alignment nor would it be possible to align the vehicle in the first place.

    The ball joints where recalled because the press fit was failing between the control arm and ball joint. Not because of an alignment issue.

  • avatar
    Zarba

    Let’s not go off on an arcane argument over ball-freakin’-joints!

    The issue is how GM will survive. RF has been consistent in saying that GM must cut brands, dealers, and fixed costs to be competitive. He’s also been consistent in saying that GM’s bloated bureaucracy needlessly drags out proiduct development times so that they’re always a generation or so behind the competition.

    The fact that GM is admitting that the Aura loses money due to exchange rates is part of the problem. “Yeah, we lose money on every one. But we plan to make up for it with volume.”

    If you can’t sell ’em at a profit, DON’T BUILD ‘EM!

    Since GM’s slide began, the only real thing they’ve done is kill Oldsmobile (just as Olds had a good lineup of cars). They’ve continued to rearrange the deck chairs on the Titanic, but have done very little to really improve the company. Product continues to be spotty. With the exception of the Solstice/Sky, can you name one genuine hit they’ve had? The new crossovers look to be a hit, but they’re already talking about watering that down with a Chevy model. Here we go again…4 different models, ad budgets, tooling, management costs, dealers, etc., etc.

    I suspect that Rick, Bob, etc., know the truth. They’re hoping they can outrun it to retirement.

  • avatar
    1984

    There are no secret cover-ups or conspiracies about recalls. Toyota got OWNED on recalls for 2006 plain and simple. Arguing that any large corporation is overstating its recalls because you think they want to be “nice” is just retarded. Bad PR is avoided at all costs and it does not mater who it is… GM… Toyota…whatever.

  • avatar
    jazbo123

    There was a joke going around GM years ago.

    A car full of GM execs are driving down the road and they get a flat. What do they do?

    They pull over and rotate the tires.

  • avatar
    Glenn A.

    Gardiner Westbound wrote:

    “The Chevrolet Volt is dependent on taxpayers ponying up $500-million for research. No money, no juice, no Volt. ”

    Absolutely true.

    Now, could someone with a whole brain explain to me why on earth we taxpayers should put up money to General Messup for such a purpose?

    Let’s recap. Does anyone recall “Blowjob Clinton’s” SuperCar effort to ‘help’ the then-big 3 develop an 80 mpg hybrid car?

    We the people ponied up tons of money for that one, and hey, I haven’t seen one 80 mpg hybrid out of the big 3 yet, how about you?

    However, I did go out and buy a 2005 Toyota Prius which gets about twice the mileage of our conventional 2002 Hyundai Sonata with similar performance, room and functionality. At least it’s progress, it’s real, it’s in my driveway and it didn’t cost me a bunch of tax money, either.

  • avatar
    willjames2000

    But Robert, I seem to recall a fairly recent DW that predicted 2007 might be the year for GM to go BK. So wouldn’t at least treading water (even a low some-$billion dollar loss) for the near term be a much better result than you predict with your deathwatch premise?

    And some of the beancounters actually think GM is on the right course. David Healy at Burnham Securities said of GM’s predictions for 2007. “They’ve demonstrated they have had a dramatic improvement in their results. Anyone who’s spent any time looking at the actual results during the course of the year will be a believer that they will do better.”

    And more good news, according to recent credit-default swap prices, General Motors Corp.’s risk of filing for bankruptcy was at the lowest since March 2005.

    (Here is the whole article. http://www.detnews.com/apps/pbcs.dll/article?AID=/20070112/AUTO01/701120394/1148)

  • avatar
    tracy

    If anyone I know is even considering a GM vehicle, I make sure I talk them out of it with statistics and horror stories so they buy a good import. I have talked dozens of people out of a domestic and into an import over the past 2 decades. (I should have a second career as a Toyota / Honda sales person!!!)

    The sooner GM and Ford go bankrupt the sooner we can all move forward and forget about these useless companies.

    GM you screwed me over twice, but rest assured I’ve cost you dozens of sales over the past few years, and I will hopefully cost you dozens of more sales in the next few years.

  • avatar
    mikey

    I’m sincere with this question.If GM is in so much poo poo,
    how come the stock is holding its own?
    I know there is a lot of folks here that are better educated than I.
    Can somebody post an honest answer?

    Thank you
    Mikey

  • avatar
    Sid Vicious

    The picture and the title of the article say it all. It’s more of what Robert has noted before “Wait and see.” Here a kick ass (on paper) concept car – plug in hybrid. But, uh, we can’t produce it until someone else develops the batteries. Maybe the US government will throw $500 mil in funding at it and see what happens. (Anybody remember PNGV?)

    Whereas the Asians show up with a truly kickass product and say “Here it is – you’ll be able to buy one within a year ready to rock.”

    A note on recalls. Recalls are either emissions or safety. Period. There are no “recalls” for peeling paint. Or sludge in motors for that matter. Neither the EPA nor NTSB cares about peeling paint. Recalls are either forced or voluntary.

    I think that the Detroit 2.5 have a long history of fighting a recall until it’s forced (Ford speed control fires anyone?) Certainly the number of Toyota vehicles recalled increases as their sales increase. I have no data but my gut feeling is that Toyota and Honda generally accept that they made a mistake, and more importantly, can afford to repair the cars. Therefore they issue the recall as voluntary, before being forced to do so by the government.

    Regarding market position and survivability: When you step back and look at all the FACTS (this is a great site for that) the big picture is simply depressing for the domestics. It’s all there to see in the press releases, financial statements and showrooms. Just tough to get a grasp on the enormity of it all.

  • avatar

    Since the 1950’s I have seen the USA go from a manufacturing powerhouse to a “free market” service economy where we just sell stuff to each other made elsewhere…. or something like that. Recently I saw a stat that 70% of our economy is of the service persuasion. So, we sell peripherals to the other 30%?
    come on Dixie Chix thinkers! Patriotism is not a bad word. It is not wrong to want your side to win! ( America is even expected, by her enemies, to take it easy in a war! Now that american cars are of equal or better quality, design and engineering the manufacturers are burdened by an unfair price disadvantage that could easily be made up with a proper tariff,( on the true import), or surcharge on the domestically assembled car. Try to sell Chevies in Tokyo! Seoul?

  • avatar
    Lichtronamo

    “Living in the Oshawa, Ontario area I see GM products in vast numbers, easily outnumbering all other makes. You can put that down to employee sales and rightly so. But, as soon as you head west to Greater Toronto, GM’s true market share shows clearly.” –

    Makes you wonder what GM’s true retail sales are once they take out all of the discounted employee purchased (not to mention fleet sales). By cutting so many workers, They could be losing their biggest market!

    “Henderson confirmed our suspicions that the the forthcoming US-spec Astra won’t earn GM a single one of those not-so-precious nickels. An unfavorable dollar – Euro exchange rate and European labor and transportation costs preclude the possibility of profit. Apparently, the Astra is merely a “bridge” product for Saturn, a temporary replacement for the Ion designed to “prove” Saturn’s new Euro-style handling/performance gestalt.”

    Hopefully this same policy applies to the 2008 Pontiac G8, substituting Commodore SS for the Astra and Grand Prix for the Ion.

    I WANT gm to make the case to me to switch from import to a G8.

  • avatar
    1984

    Tracy wants to start ANOTHER Import vs Domestic hoe-down!

    It’s waaaaay to early for that ;-)

  • avatar
    chainyanker

    jazbo123 & 1984,

    I was only debating 1984’s statement, “Ball joints will not change the alignment”, not the degree of wear or the real reason for any recall. I know the ball joints have no adjustment – I’ve replaced a few myself. I miss grease zerks.

    http://www.aa1car.com/library/ball_joints.htm
    “A loose ball joint can cause misalignment, uneven tire wear, sometimes a steering pull to one side, and/or suspension noise.”

  • avatar
    starlightmica

    Autonomy. Hy-Wire. Sequel. Volt.

    Sigh. It’s all Duke Nukem Forever to me.

    Russia, India, China. All sound like good places to outsource the Tubes to. Heck, outsource Buick to China right now! At least the Indian version of Rick Wagoner won’t cost anywhere as much.

  • avatar
    blue adidas

    “There are many people who have been burned by GM in the 80’s and 90’s and I am one of them. ”

    I’ve been left stranded “burned” by only two vehicles in my 36 years. One Corolla and one Elantra. I attribute these brands good quality rankings with good marketing and nothing more. Unlike GM or Ford owners, Toyota owners assume that if something goes wrong with their Camry, that they somehow did something wrong. “My Camry’s wheel wells are completely rusted-out… I shouldn’t have driven it in the rain so much!”

    Toyota and Hyundai have learned that people are really gullible.

  • avatar
    Geotpf

    GM’s stock is improving because they aren’t in as much obvious danger as they were a year ago, and have gotten rid of a lot of thier union workers with buyouts. However, shrinking your way to profitability has never worked for any company on the planet, ever, at least not without a bankruptcy first. It simply doesn’t happen, because there are old fixed and legacy costs that began when the company was big, and don’t shrink when the company becomes small-plus, if a company’s sales are down (as GM’s are), they are obviously doing something wrong.

    As Farago stated, thier only hope is on China and other emerging markets (first time car buyers don’t really know enough to know that Toyotas are more reliabile, nor do they really care-they are just glad they can afford a car), because thier domestic sales are going down quite steadily with no end in sight.

  • avatar
    Geotpf

    starlightmica-“It’s all Duke Nukem Forever to me.”

    Heh. You can never have too many Duke Nukem Forever vaporware jokes. :)

  • avatar
    ktm

    Chainyanker, 1984 is correct that ball joints do not affect the alignment in the manner that you are speaking. You do not (and can not) adjust a ball joint during an alignment. They simply allow the front suspension to have a full range of motion.

    On my 240z with McPherson struts, the ball joint attaches to the control arm. The ball join attaches to the steering knuckle on the bottom and the McPherson strut attaches to the knuckle on the top. My toe is set by the outter tie rods. I do not set caster or camber. However, camber can be set by slotting strut tower or adusting the lower control arm. I could set caster the same way (by slotting the shock tower).

    The ball joint allows the control arm to pivot up and down. The McPherson strut is fixed at the top and is connected to the control arm via the ball joint.

  • avatar
    Alex Rashev

    Why should I pay more to american workers when someone else is working more efficiently for less money? It’s like narrowing the gates for the home team – it might help them on their own field, but over time they’ll play even worse outside. If you really want the American Phoenix to rise from the ashes, get an MBA, join the team, and kick ass. America needs you.

  • avatar
    1984

    .chainyanker,

    Common… Just let it go. Your uncle said he was covering up bad GM ball joints with alignments… As someone that has done alignments for years, the whole statement that an alignment can cover up a bad ball joint is bizzar on levels that defy description.

    GM widened their spec on wheel alignments a few times and GM also had some bad ball joints. I think you are mixing up a few of your uncles stories together.

  • avatar
    stedwoo

    While I think you can bring up many good points you are starting to sound like sour grapes or a foreign car fan. I agree that some one needs to keep the 2.5 on their toes but I think you over stepped with some of your comments  Chief Financial Officer Fritz Henderson attributed some of the company’s predicted cash burn to a $1b increase in capital spending. The extra cash will pay for new model development, ongoing transmission upgrades (from four to six-speeds) and foreign expansion. They are talking about spending 10 percent of what they lost in FY 2005 on capital spending, which while it hurts cash flow in short term is amortized over time is less than 200 million a year. S-spec Astra won't earn GM a single one of those not-so-precious nickels. An unfavorable dollar – Euro exchange rate and European labor and transportation costs preclude the possibility of profit. Apparently, the Astra is merely a "bridge" product for Saturn, a temporary replacement for the Ion designed to "prove" Saturn’s new Euro-style handling/performance gestalt. Huh. You got discussed cash flow; why spend capital converting a plant in the US until you know it will sell. You have excess capacity at your plant in Europe so break even for a year or two and spend the money where it is needed. It was but 2 years ago everyone was talking about shuttering GM and it was a cooked goose. Their products were said to be unsaveable and no one wanted them, according to the press. Bankruptcy was the only option to save the ship. Now they just handed the foreign carmakers their butts and introduced cars that everyone is talking about. They made money in the last reported qtr and have dropped incentives by 700 dollars a car. They are not out of the woods yet but GM got in trouble over a 20 year span and Rick Wagoner and Lutz have made a pretty big turn around in the last two years. So how about giving them a little more credit or it will start to sound like whining. 

  • avatar
    nino

    Now that american cars are of equal or better quality, design and engineering the manufacturers are burdened by an unfair price disadvantage that could easily be made up with a proper tariff,( on the true import), or surcharge on the domestically assembled car. Try to sell Chevies in Tokyo! Seoul?

    I hope this was sarcasm.

    This statement depresses me because it is a tacit assumption that America CAN’T COMPETE unless we artificially rig the game. And spare me all the “not level playing field” crap about other markets.

    Having read the Forbes article on Honda, is it fair that a company like that is penalized while the “business as usual” model in Detroit is given competitive breaks?

    Why not just dispense with any free market illusions and force Americans to buy domestic cars?

  • avatar
    audimination

    I think the real issue here, aside from the lack of forsight by the domestics for so long, is that the asians have been playing on an unlevel playing field. They have been (legally) cheating the system for years to make their product cost cheaper, and thereby give them more leeway to sell either similar cars at a cheaper price or better cars at a similar price.

    Dumping and currency manipulation in the 80s (does this remind anyone of China today?), trade imbalances, and most greivous of all, tax evasion by tricking poor counties into giving obnoxious concession have given the Japanese an unfair advantage that the domestics could never get. The UAW’s stranglehold on the domestics has harmed them a lot.

    Of course, executives galivanting in private jets is not the right way to fix the problem, and, despite their recent improvements, the domestics still have a long way to go. However, we shouldn’t forget that, for quite a while, they have been playing on a field that was dramatically tilted to Japan’s benefit!

  • avatar
    Cowbell

    Glenn A,
    I think each one of those Prius.. (I’m have a hard time thinking of the plural) Prii cost 3,150 from the rest of us tax payers.

    And lets see, full tax credit for the first 60,000 (That’s credit Not deduction, mind you) and 50% credit for the rest sold… And toyota reports 106,971 Prius sales…

    That’s 263 millions in tax subsidies.. Holy crap, did I do that math right!? I just double checked and got the same answer. Someone double check me on that one, because I had no idea we were paying the Prius drivers that much money to pollute America with their dangerous levels of smug.

  • avatar
    GMrefugee

    “Now, could someone with a whole brain explain to me why on earth we taxpayers should put up money to General Messup for such a purpose?”

    Glenn A., I am glad you asked!

    IMO, we all would be well served if the US supported the domestic auto industry from a common solution investment perspective. A better battery solution would benefit the manufacturers and our reliance on foreign oil alike. I agree the money should not be handed over to any one of the automakers but rather made available for cooperative research. There would need to be some agreement as to the potential outcome. Think cleaner air, lower hybrid costs, etc. I would vote for this investment before I spend $1 more securing oil fields in Iraq. I mean, er, freeing the Iraqi people.

  • avatar
    nino

    I think each one of those Prius.. (I’m have a hard time thinking of the plural) Prii cost 3,150 from the rest of us tax payers.

    And lets see, full tax credit for the first 60,000 (That’s credit Not deduction, mind you) and 50% credit for the rest sold… And toyota reports 106,971 Prius sales…

    That’s 263 millions in tax subsidies.. Holy crap, did I do that math right!? I just double checked and got the same answer. Someone double check me on that one, because I had no idea we were paying the Prius drivers that much money to pollute America with their dangerous levels of smug.

    The subsidies cover other hybrids as well, not just the Prius.

    And last I checked, it is available to ANYONE that chose to buy a hybrid, including YOU, if you wanted to buy one.

    But why aren’t domestic manufacturers taking advantage of this tax loophole? Ah, possible they’re taking advantage of the tax loophole given to large SUVs calssified as “farm equipment”.

  • avatar
    ktm

    audimination, your statement would be true if you were simply talking price. Price is not the issue with the Big 2.5, it’s the years of passing off inferior products that has caught up to them.

  • avatar
    nino

    IMO, we all would be well served if the US supported the domestic auto industry from a common solution investment perspective. A better battery solution would benefit the manufacturers and our reliance on foreign oil alike. I agree the money should not be handed over to any one of the automakers but rather made available for cooperative research. There would need to be some agreement as to the potential outcome. Think cleaner air, lower hybrid costs, etc. I would vote for this investment before I spend $1 more securing oil fields in Iraq. I mean, er, freeing the Iraqi people.

    Well put.

    However, isn’t it just a bit disingenous of GM to trot out a car trumpeting their “commitment” to energy efficiency and non-reliance on fossil fuel, when it depends on here-to-forth non-existing technology.

    BTW, I’m coming with a new car that runs on AIR, but it will depend on the US government to come up with the technology.

  • avatar
    KixStart

    FirstGuy: “… I’ve been stranded/burned by GM…”
    SecondGuy: “… Well, I’ve been stranded/burned by Toyota…”

    Well, SecondGuy, so what? The fact is, GM, Ford and Chrysler have a bad reputations for quality/reliability and the numbers from various sources (CR, JDPower, others) show that they got their repurations the old-fashioned way. They earned them. They were selling cars that were crappy.

    Now, it could be that Toyota’s coasting on a reputation it no longer deserves and it could be that GM, Ford and Chrysler have turned it around and the new Impala or whatever is going to be a better car than the new Camry 10 years down the road but, if so, that’s too bad for GM, Ford and Chrysler. They made their bed; they get to lie in it.

    If Toyotas is losing its way and their new cars are crap, 400,000 Camrys going into circulation this year will ensure that people will end up knowing someone with a bad Camry experience and Toyota’s chickens will come home to roost. But whining about misperceptions of Toyota isn’t going to accelerate the process of making Detroit look better than Toyota.

    If GM, Ford and Chrysler are committed to getting a good reputation for reliability, they’re going to have to act as though the cars are reliable. There’s three approaches to achieving this and all are necessary:

    1. A really good warranty. If there’s somebody out there with a better warranty, yours isn’t good enough.

    2. Making sure the dealer network understands that the vehicles under warranty are to be fixed, correctly, at no cost to the customer, without argument or delay.

    3. Get proactive on problems. Keep careful track of what’s going wrong with the cars and, when you notice anything statistically significant, get ahead of things with “service bulletins” or whatever you care to call them but bring the [email protected] cars in and fix the problems BEFORE the customer is inconvenienced. Extend the warranty on troublesome parts, so the customer feels that the situation gets made right.

  • avatar
    dolo54

    that part about GMAC bears closer scrutiny. Perhaps their strategizing “gee we can’t make money building cars, but there’s good money in the loansharking trade!” I always hear ads for a particular Toyota dealer “Bad Credit? No Credit? Noooo Problem!” well no problem as long as you don’t mind repo men showing up in a year or so. there was an interesting news item today that Toyotas planning on building a bunch of car manufacturing plants here in the US. hmmmm… they will be non-union I’m sure, but probably won’t be paying slave wages. I also read that only a small percentage of US auto workers are unionized right now. are the unions really as big a problem as the union-bashers make out, or is it the management?

  • avatar
    Alex Rashev

    I’d rather pay tax dollars for an existing solution that works. At least it will encourage others, as opposed to bribing them.

    As for paying half a billion for better battaries… Sounds like a scam to me. Such batteries already exist – A123 makes an AA (almost) sized cell that lets you pull 70 amp continious and 130 amp burst. That’s about a quarter to a half of a kilowatt out of a 40g cell, at 3.6v. Model airplane builders and cordless power tool manufacturers have been using them for almost a year now.

    If you want to power a 100 kilowatt (133hp) electric motor, you need about 400 cells, or 35 pounds. Most regular car batteries weigh more.

    Now, the issue is that it’ll give you a range of about 20 miles – enough for most daily commutes, but too small for longer runs. But GM solution already has a built-in generator, that will give you nice 60mpg even in pure gas mode. So what else do they need? I’ll tell you. YOUR MONEY ;)

    Retail, these batteries cost about 10$ a pop, and they will be the single most expensive part of the car. No way in the world will GM be able to compete on such a level field. Hence, they want to scare politicians into “no cash, no electric car” tactic.

    There’s nothing that prevents GM from building Volt-like vechicle. Battaries are there, motors are there (heck, they have their own very nice in-house motor and controller), and proper generators have been there for the last hundred years or so.

    I think I should start a Piston Deathwatch Series.

  • avatar
    dolo54

    To no one in particular: “We Prius owners are a breed apart.”
    -Larry David, from a recent “Curb Your Enthusiam”

  • avatar
    dolo54

    I tried putting some AAs in my gas tank… now my car doesn’t start! FU Rashev!

  • avatar
    Luther

    The Chevrolet Volt is dependent on taxpayers ponying up $500-million for research. No money, no juice, no Volt.

    Its like a 50 year old man going to Mom and Dad for a handout. More accurately, GM cant build cars that we are willing to buy so they go to the Federal Mafia to get them to take our money at gun-point. Why didnt GM go for a $10.6B research grant? Or just build 22 Volt-esque type concepts at $500M each and then do a Back-in-Black victory lap.

    I am thinking of conducting research on how close a fly gets to a ceiling before it flips over to land. I bet I could get a $500M research “grant” for that even though I aint no Senators son.

    Pathetic.

  • avatar
    Alex Rashev

    Oh, come on, ball joints either work or not work. You can’t widen the specs to save yourself from replacing ball joints. Now, AFTER you replace them, you better do an alignment because you’ve just disassembled the whole front end.

  • avatar
    Alex Rashev

    As for DeathWatch series, while I agree that it could slow down a little (especially at times when it was uncalled for), it’s still obvious that GM has a good chance of becoming the world’s biggest fiasco. Documenting it from day one even before it happened is a brave and risky undertaking.

    Heck, maybe the DeathWatch will be instrumental in GM’s turnaround. People work harder when there’s a guy with a whip behind their back. Proven fact.

  • avatar
    jazbo123

    Perhaps it’s indicative of something that we ended up discussing balljoints rather than GM’s woes.

  • avatar
    audimination

    "People work harder when there’s a guy with a whip behind their back. Proven fact." Um, actually, that's wrong. The exact opposite has been proven in numerous studies. People with a whip behind their back almost always work with less vigor than someone who loves what he's doing or loves the person he's doing it for… obviously i’m not trying to say that the people at GM love what they’re doing or love their management. Just pointing out that a whip is almost always the wrong form of motivation.

  • avatar
    Alex Rashev

    Obviously people at the helm of GM have no love for it – they’re getting paid too much to care about money, even. But nobody wants to go down in history as the most publicised failure ever, and GM execs are no exception. Media attention is the whip they need to make an effort.

  • avatar
    Luther

    “People work harder when there’s a guy with a whip behind their back. Proven fact.”

    Reminds me of the saying “The beatings will continue until morale improves”. Force will make people work just as much as the absolutely have to. It does little for productivity.

    I think the only thing that can save GM is growth in other countries. I am surprised they arent persuing foreign markets more… Maybe they are but the the US press just doesnt cover it. The new CTS is going global in a few months.

  • avatar
    chainyanker

    1984,

    Please scroll through the above posts to see who said what. My comments were only about one line in your response to someone else. My point still stands and any reputable mechanic would agree. Of course, maybe past GM stuff is spec’d so loose that a suspension component would have to be a few miles from failure for the unfortunate owner to even notice.

    And thanks RF

  • avatar
    Jeffer

    My last (ever) GM vehicle was a new 1994 Chev Astro Van, and while it was head and shoulders above some of the other GM vehicles I’ve owned (Vega,Chevette and Citation)
    It still disintegrated at an alarming rate, among many things, 3 of the 4 door handles had to be replaced by 15,000 miles. At 30,000 miles, I noticed the front tires were feather-edging and took it in to the local tire shop for an alignment. I was told I needed to replace the tie-rod ends. Went to the selling Dealer, they checked and informed me that the amount of play was “within GM specs”so no warranty. Went back to the tire shop and had them replaced, never went back to the dealer. In 5 years of owning this vehicle, I spent another 20% of the purchase price in non-warranty repairs (not including regular maintenance items).

  • avatar
    chainyanker

    jazbo123,
    1984,
    ktm

    This discussion is way of topic so this will be the last I’ll say about it. My initial post was only in response to the statement, “Ball joints will not change the alignment“. I took that to mean that worn ball joints have no effect on alignment. I realize you don’t align a front end by adjusting the ball joints. A good mechanic won’t do an alignment on a car with bad ball joints because they will affect the alignment. If I’m wrong then so are many other sources:

    http://www.carcare.org/Steering_Suspension/ball_joint.shtml
    “The most common vehicle symptoms associated with worn ball joints are wandering, uneven tire wear, and erratic steering.”

    http://www.aftermarketnews.com/default.aspx?type=wm&module=4&id=3&state=DisplayFullText&item=6468
    “When ball joints become worn, they can make suspension noise and upset wheel alignment.”

    http://www.mirafiori.com/124susp/
    “When Ball joints get worn, they cause camber problems, and a general numbness in the steering.”

    http://www.aa1car.com/library/ball_joints.htm
    “Ball joints should be replaced when the amount of play or movement in the joint exceeds the maximum allowed by the vehicle manufacturer. ….A loose ball joint can cause misalignment, uneven tire wear, sometimes a steering pull to one side, and/or suspension noise.”

  • avatar
    rtz

    GM has image problems and a reputation. Everyone who has ever owned a car that was a complete piece of junk and it cost them a lot of money in continual repairs now drives a car made by an Asian company. I’ve seen it so many times.

    Go to a salvage yard some time to just walk around. You will be absolutely amazed by the type and quantity of certain makes and models of cars. Every car that you no longer see on the streets any more are in salvage yards. Early to mid `90’s Grand Am’s? Lots of them and more. It really says something when there is a row of ~300 Grand Am’s sitting in there. I’m going to take pics next time I go showing the amounts of certain cars and the complete lack of others. Where’d those cars go?

    Seems like there was an absolute surplus of Neons the last time I was there. I sure don’t see many of those on the streets these days.

    If it wasn’t ice over outside right now; I’d go tomorrow.

  • avatar
    kjc117

    In order for GM and Ford to survive they have to reduce their size and deal with unions. Even if that means to begin to increase their production in Mexico and China.

    Personally, I would never purchase a big 2.5 auto.
    My parents purchased Olds, Pontiacs, Caddys, Fords and Buick when I was young and saw first hand the crap they were. Not only were the autos. crap but the dealer’s were even worse. The us vs. them attitude both manufacturer and dealer have toward the customer is just disgusting. They take of their own but the customers are just looked upon as suckers.

    These are the same people whom want you to buy American and insult you for driving a foreign car.
    Nice, insult your potential customers and expect them to purchase your product.

  • avatar
    SherbornSean

    Back when I was a strategy consultant, I spent a year trying to help turn around a major US computer company. When I started, they had 120,000 employees and by the end of the year, they had 40,000. It was an ugly scene, in terms of the personal tragedy for so many people whose livelihoods ended. Morale was a mess, and so were the financials.

    I know a lot of people posting today have had bad experiences with Big 2.5 product, and many remain bitter. I don’t ask you to forgive them, or even to give them another chance, but to at least remain sensitive to the fact that between GM, Ford, DCX and Delco, about 100,000 families are losing their breadwinner this year or last.

    I think Robert nailed it on the head. When you are in the middle of a turnaround, two things matter. The first is time. You need a couple of years to cut redundant positions, and even businesses, and to get costs under control. According to Rick Wagoner, GM has taken $9B out of its cost structure, and is eyeing the second $9B, which will put GM on firm ground financially.

    That sounds about right. But the second thing a firm in turnaround needs is a working business. Once you’ve gotten the organization and financials downsized, there has to be a ‘there’ there. If GM only cuts, and cannot retain its customers, then they will be in the same mess in another 3-4 years, after Toyota has added another 5 factories in the US and is again taking away share like a young Greg Allman.

  • avatar
    windswords

    “Heck, maybe the DeathWatch will be instrumental in GM’s turnaround. People work harder when there’s a guy with a whip behind their back. Proven fact.”

    I may be wrong but what I think he or she was trying to say is that when the “wolf is at the door”, when there is “no tomorrow” that you will become a lot more focused on what you are doing and work harder. I don’t think he meant that someone was threatening and creating a work enviromnment of intimidation. Another words he was saying it’s “do or die” time at GM.

    If I misunderstood your post Alex Rashev please correct me.

  • avatar
    210delray

    audimination: it’s a brand new year already!

    The huge number of Toyotas recalled (2.2 million) was for 2005. I see that Toyota’s recalls in the US for 2006 decreased sharply to 766,000 vehicles.

    link

    So maybe 2005 was just a blip caused by the large number of SUVs and pickups recalled for faulty tie rods (1989-96 models).

    For the record, GM and Ford were both down sharply as well, but DCX was up.

  • avatar
    Rday

    For years I was a diehard GM customer; that was until I started having big problems with their cars [early 80’s]. I am still angry over all the problems they have had. I am starting to think that there may be some hope in GM pulling off the reorganization with chapter 11. They are doing well in Asia and other areas and this may just make the difference. It may turn out that GM will sell the vast majority of their cars in China, India, etc. but I have a hard time believing Toyota and others will let them take over the market too far. ALso I do not trust the Chinese government to allow foreign automakers to take over too much of their domestic market. They may let them export from China but I think the Chinese want government affiliated Chinese companies to be the most successful. Don’t know where this leaves GM, but I would not want to put too much of my eggs in China.

  • avatar
    roadracer

    “…taking away share like a young Greg Allman.”

    What?

  • avatar
    g4zilla

    Kixstart wrote:
    “3. Get proactive on problems. Keep careful track of what’s going wrong with the cars and, when you notice anything statistically significant, get ahead of things with “service bulletins” or whatever you care to call them but bring the [email protected] cars in and fix the problems BEFORE the customer is inconvenienced. Extend the warranty on troublesome parts, so the customer feels that the situation gets made right.”

    I agree, but had to laugh, as one of my co-workers said to me just yesterday: “I can’t believe what the service tech said to me when I was trying to get something dealt with on my Envoy. I was getting frustrated, and told him no wonder people buy Toyotas. His response was “Oh, you want to buy a Toyota? Then I’ll make sure to write down that you never get service!”

    I do believe she has bought her last GM product…

  • avatar
    Rastus

    It’s quite telling that the “World’s Largest Automaker” won’t invest in themselves without external financing.

    What does that say?

    To me it says EVERYTHING!!

    Innovation, Drive, Capitalizing on your God Given talent and that of your employees, Pride in yourself as an organization, the idea of a better tomorrow, the SATISFACTION derived from knowing YOU as an INDIVIDUAL actually had an impact and left the world just EVER SO SLIGHTLY better off than before you graced this planet, …and let’s not forget(!!) NATIONAL PRIDE, knowing YOU represent the ***U***S***A***, knowing your employees (of which many have given 20+ years of service), your local communities HEALTH and WELLBEING….

    ….ALL OF THE ABOVE AND MORE IS TOTALLY FLUSHED DOWN THE TOILET!!!

    ….all because Uncle Sam and the Tax Payers would not pay your R&D bill!!!!

    Losers of the UTMOST magnitude! Why not become a defense contractor if that is your attitude? You want some work done in such-and-such a field of study? Why, pay up (the wazoo) and maybe it’ll get done.

    Honest to God, people, this is the downfall of American industry.

    Where was Intel back in the 60’s when GM was King of the Hill? Ans: Non-existent!! Same with many many MANY other fine companies.

    Yes, we (the tax payer) *OWES* GM!!!

    Welcome with Open Arms Guangdong Motors!!! Welcome indeed!!!

  • avatar
    210delray

    Maybe it should have been phrased, “taking away share like a young Genghis Khan.”

  • avatar
    scottdh

    “While all eyes were on the plug-in Chevrolet Volt concept car”, did anyone notice it’s design was a ham-handed steal from the Saab Aero X (to say nothing of the fact that the “plug-in” capability was on the Saab first–but, GM quashed that so the technology could appear to come from one of their domestic brands)?

  • avatar
    g4zilla

    “…taking away share like a young Greg Allman.”

    What? “

    Try this: …taking away Cher like a young Greg Allman.

  • avatar
    jtkk67

    I have been a die hard GM fan since 1989. I have owned Pontiacs, GMC’s, and most recently Cadillac. I worked for a GM dealer for the last 18 years, I just recently started reading the blog on the General’s death watch, and to be quite honest a lot of what is being said here, I have witnessed and surmised first hand for many years now.

    The simple fact fo the matter is that GM does not have the financial power or the market share necessary to begin to stay as number one in the market place. The actions that need to take place to save there reputation are to little to late. Everything that they are trying to do now, needed to be done 10-15 years ago when they had their first big decline in market share. They said it was a temporary setback. Product was old and outdated, they didn’t want to keep up with the changing market and now they are getting left behind by the foreign manufacturers. Can GM pull it out? possibly, but it will be at the expense of losing quite possibly half of their dealerbody structure. Glad I’m not in that rat race anymore!

  • avatar
    jtkk67

    By the way, just one little side note, I dont want to be considered all doom and gloom. Every one of my GM products was extremely reliable, and never had any major repairs done to any of them outside of the routine maintenance. I have a 95 Trans Am in my driveway with almost 100,000 miles on it and the only thing I’ve really done to it is replace the battery, and had it repainted, because my wife never took care of it. General Motors quality has come a very long way over the last 18 years, but the damage from there i don’t care attitude, has already been done. Nice going GM!

  • avatar
    cheezeweggie

    It’s funny how Americans talk about competition and being number one and then when someone kicks their asses they want to take their ball and go home.

    Tarriffs on Imports ? My Nissan V6 engine is made in Tennesee. The Chevy Equinox engine is made in China (it is stated right on the window sticker). I guess GM will need to pay a tarrif on that engine.

  • avatar
    geeber

    cheezeweggie: Some Americans whine about competition…but it looks as though lots more like competition just fine, judging by what they purchase.

    GM purchasers benefit, too, because competition has forced the General and the UAW to make improvements and accept changes that they otherwise would never have made.

    Tariffs, incidentally, would only backfire in the long run, as the strongest foreign companies already have a production presence in the U.S. and tariffs would only encourage them to expand that presence.

  • avatar
    kaisen

    http://www.bloomberg.com/apps/news?pid=20601087&sid=atokW4TU77n8&refer=home

    “GM bankruptcy risk at 22 month low.

    The automaker may be due for its first debt ratings increase since 1998 and there’s just a 27 percent chance of a bankruptcy in the next five years, down from 68 percent in December 2005, based on swap prices and a JPMorgan Chase & Co. valuation model.”

  • avatar
    oboylepr

    GM bankruptcy risk at 22 month low.

    The automaker may be due for its first debt ratings increase since 1998 and there’s just a 27 percent chance of a bankruptcy in the next five years, down from 68 percent in December 2005, based on swap prices and a JPMorgan Chase & Co. valuation model.

    I hope you are right Kaisen, I really do. Here is another assessment:

    http://www.generalwatch.com/editorials/editorial.cfm?EdID=180

  • avatar
    Johnson

    Arguing that any large corporation is overstating its recalls because you think they want to be “nice” is just retarded. Bad PR is avoided at all costs and it does not mater who it is… GM… Toyota…whatever

    What you and many others fail to realize is that because of Toyota’s Japanese origins, and because of the sort of culture and Japanese ideals rooted in Toyota’s corporate culture, not admitting to even the smallest problems will cause *even more* bad PR.

    In Japan, to lose honor and integrity is big, if not bigger than getting bad PR here in North America. Not owning up to problems, even if they may be small, is seen as dishonourable, and if Toyota actually did keep things continually swept under the rug, then there would come one day where Toyota in Japan would get eaten alive.

    Anyone remember the whole Mitsubishi fiasco, with the quality recalls, and all the lawsuits, and the cover-ups? Mitsubishi barely survived, mainly thanks to the fact that Mitsubishi manufactures more than just cars, and that Mitsibushi Heavy Chemical helped out Mitsubishi motor manufacturing.

    If Toyota were to do anything similar along the lines of Mitsubishi, it would be corporate suicide for them.

    The reason in fact, that Toyota had this many recalls in 2006 is they brought out all issues into the public eye that were either small issues, or issues that Toyota preferred to kept quiet. The recent settlement on the whole sludge issue, and Toyota’s acknowledge that it will cover any repairs or repair cost for sludge-related issues. In 2006 Toyota also made recalls for many minor details. To be fair, so did some American automakers, namely GM, and they too should be commended for that.

    For Toyota, it’s biggest quality-related problem that was left unresolved was the sludge issue, and that’s fully been settled now. It remains to be seen if GM, Chrysler, and Ford can follow in the same way and bring to light any outstanding issues they have into the public light, as in the millions of faulty cruise control switches in Fords, or prevalent piston slap in millions of GM engines.

    As for any critics here that think it’s unlikely for GM to go into Chapter 11 or Chapter 7, history all too often repeats itself, and it would make not the first, nor the last huge corporation to fall apart. It was only years ago that the infamous WorldCom and Enron fiascos happened. Two companies that once, were thought unstoppable, just as GM was once thought, and by some disillusioned individuals, still is.

    Some of you also know of the faulty suspension ball joints on 1st generation Tundras. This was a bad design decision, which the chief engineer of the new Tundra recently acknowledged in Autonews. The whole suspension is redesigned, and a different ball-joint system is used in the new Tundra.

  • avatar
    kaisen

    @ oboylepr:

    I linked an article from Bloomberg.com dated January 11th

    You linked an editorial from Buickman

    There’s no “I’m right” in it, just the facts as someone else presented them. Just thought it would be a useful contribution to the discussions here.

  • avatar
    Johnson

    I linked an article from Bloomberg.com dated January 11th

    You linked an editorial from Buickman

    There’s no “I’m right” in it, just the facts as someone else presented them. Just thought it would be a useful contribution to the discussions here

    Buickman actually worked for GM before. Who’s to say in Bloomberg is any more accurate in this case than Buickman? We don’t know for sure, but many of the things Buickman says are backed up by factual data, and a lot of his postings are in line with RW.

  • avatar
    kaisen

    Buickman actually worked for GM before. Who’s to say in Bloomberg is any more accurate in this case than Buickman?

    The Buickman never worked for GM. He was/is a *salesperson* at a Buick dealership.
    Accurate? Maybe. Credible? Meh. Unbiased? Not in the least.

  • avatar
    Johnson

    The Buickman never worked for GM. He was/is a *salesperson* at a Buick dealership. Credible?

    Fact is, he dealt with a lot of GM people for years, and his posts could have simply been brushed off, were it not for quite a bit of truth contained in them.

    Whatever opinion people may hold of him is largely irrelevant, considering many of the things he says are true. And I doubt that a mere “Buick dealer” would know the things he does about GM.

  • avatar
    kaisen

    Jim ‘the Buickman’ Dollinger is is a *salesperson* at a Chev/Buick dealership, not a manager, not a dealer principle, not an ‘industry insider’, but merely a salesperson. He lives in Michigan, so perhaps he rubs elbows with GM employees, but his information is rarely anything that you yourself couldn’t find by reading trade publications. Robert Farago has as much access to GM information (and even that sounds like an insult to RF – not intended).

    Nonetheless, the commentary is biased, the agenda is transparent, and the tone is markedly bitter.

    I’d prefer a more legitimate source for my facts.

  • avatar
    Johnson

    Think what you want, it does not change the critical situation that GM is in. Just as many claim Buickman is not legitimate, many also claim that TTAC isn’t legitmate. For some, the only thing they consider “legitimate” is their own narrow-minded opinion.

  • avatar
    oboylepr

    Just for clarification, the editorial on Generalwatch.com I linked to was itself referring to comment made by Stansberry & Assoc.. Sorry about that, I guess I could have linked to it directly.

  • avatar
    kaisen

    …comment made by Stansberry & Assoc.. Sorry about that, I guess I could have linked to it directly.

    Please do, I’d like to see it.

  • avatar
    kaisen

    Think what you want, it does not change the critical situation that GM is in. Just as many claim Buickman is not legitimate, many also claim that TTAC isn’t legitmate. For some, the only thing they consider “legitimate” is their own narrow-minded opinion.

    A legitimate news source (reference) is different than the legitimacy of opinion or editorial. I can link all day to people’s opinions that corroborate my own (as could anyone), and some of them will be well-founded and well-articulated. But that does not mean they are ‘factual’. They are giving their opinion based on how they interpret the facts, and that’s okay.

    TTAC is clear about what is an editorial, and pledges to be truthful and unbiased in reporting. That’s why we’re here. If RF wants to interpret the data his way, he has every right to comment and editorialize. And so do we.

  • avatar

    Anybody remember Martha Mitchell?

    Martha was the wife of John Mitchell, Attourney General during the Nixon Adminstration. Martha was famous for her late night phone calls to the press, when she made all kinds of wild accusations about wrong-doing in the White House.

    The press thought her delusional. She wasn’t. (“The Martha Mitchell effect” is now used by psychiatrists for misdiagnosed delusions).

    Buickman is much the same: a man dismissed as a total crank who’s view of GM’s inner sanctum is hard to believe, but entirely credible. (And much further “out there” than mine.)

    [This from Wikipaedia: Nixon was later to tell interviewer David Frost (in September of 1977 on Frost On America) “If it hadn’t been for Martha Mitchell, there’d have been no Watergate.”]

    My take on Jim: https://www.thetruthaboutcars.com/?p=497

  • avatar
    kaisen

    Your link to your January 2006 (exactly one year ago) article on Buickman sheds some light. The Tahoe Hybrid turned out to be legit, and there were indeed running prototypes of the two-mode Tahoes before Jan 06. The UAW didn’t strike in 2006. Kerkorkian, or some other ‘shadow group’, hasn’t swooped in to purchase the pieces of a broken GM.

    The sky hasn’t fallen, yet. Then again, Martha Mitchell wasn’t ‘right’ until after Watergate broke. Someone’s crystal ball will turn out to be clear and someone else’s fuzzy. Buickman is no Nostradamus.

  • avatar
    SherbornSean

    G4zilla,
    Thanks for saving my obscure Cher reference!

  • avatar

    Did I miss something? What Tahoe hybrid? And GM clearly tried to pull a fast one with AutoWeek.

    As for the other prognostications, the situation is obviously fluid. But the general trend has been both predicted and chronicled: downwards trend in market share, ongoing cash burn, sales of assets, obfuscation, disinformation and, most importantly of all, a complete lack of accountability.

  • avatar
    SherbornSean

    Yes, Robert, but the new Malibu is just around the corner! Skip on the LTZ and upgrade to the Messiah edition.

  • avatar
    geeber

    Johnson: Think what you want, it does not change the critical situation that GM is in. Just as many claim Buickman is not legitimate, many also claim that TTAC isn’t legitmate.

    Buickman has been thoroughly refuted on other sites (www.cheersandgears.com) by industry insiders who do NOT work for GM. So when someone claims that he is not legitimate, maybe it is because they have read his posts, and the posts of those who have refuted him, and therefore are informed of the validity of his writings.

    We also, incidentally, can tell the difference between the validity of an opinion by a disgruntled Buick salesman in Flint and the research of a major financial organization based in the nation’s financial capital, with access to sources not only within the auto industry, but also the major financial houses of New York.

    Johson: For some, the only thing they consider “legitimate” is their own narrow-minded opinion.

    No, it’s because we understand the difference between legitimate reporting based on research and the hyperventilating of a conspiracy theorist who blames everyone short of Britney Spears for GM’s present predicament, and offers his silly “Return to Greatness” plan as the cure for all that ails GM.

    Incidentally, his plan consists of better marketing and allowing the dealers to charge more for their products to improve their margins (and, undoubtedly, pay their sales reps more).

    Nothing about better quality, or more up-to-date drivetrains or consolidating divisions.

    Heck, he still gets his panties in a twist over the decision to eliminate Oldsmobile, attributing that to part of the big, dark conspiracy to dismantle GM.

    If Mr. Lutz had offered up the “Return to Greatness” as GM’s savior, you’d tear it to shreds.

    Mr. Farago: As for the other prognostications, the situation is obviously fluid.

    In other words, he didn’t know what he was talking about, and he made a bunch of wild, conspiracy-theory predictions that did not pan out, but we’ll cut him some slack.

    Mr. Farago: But the general trend has been both predicted and chronicled: downwards trend in market share, ongoing cash burn, sales of assets, obfuscation, disinformation and, most importantly of all, a complete lack of accountability.

    Please…I expect better of you.

    I could say that the sun will continue to rise in the east and set in the west, it will rain some time this month in Pennsylvania, and some bonehead will cut me off on the way to work this week, and I’ll be just as much of a prognosticator as Buickman.

  • avatar
    rtz

    RE: Tahoe

    “An available hybrid powertrain looms as the main news for 2008. The result of a GM-DaimlerChrysler-BMW collaboration, this “two-mode” system is said to use twin electric motors and a 300-volt battery pack to assist a 5.3 V8 with GM’s Active Fuel Management. It allows low-speed driving on either power source, and promises better overall fuel economy than conventional powertrains. Rival Dodge’s midsize Durango SUV is expected to offer a similar hybrid setup during the ’07 or ’08 model years.”

    “Further out, General Motors says it may offer a 330-hp diesel V8 for its largest SUVs by model-year 2010. The company is cagey about details for now, but says this new diesel will be a 32-valve dual-overhead-cam design–and clean enough for sale in all 50 states. GM projects a Yukon so equipped would get around 28 mpg in city driving vs. 21 for a comparable gas-engine model.”

    http://consumerguideauto.howstuffworks.com/2007-chevrolet-tahoe.htm

  • avatar

    rtz: While I have no doubt that GM will eventually have a "proper" hybrid engine, GM was "pretending" to AutoWeek that it already had one. That ain't right.

  • avatar

    In truth, I was the top Buick salesman in the USA 6 times, managed a dealership to #1 in the country, and another to a 52% increase first year as General Manager.

    Here are some responses by industry veterans after reading “Return to Greatness” Keep in mind only the first twenty steps were released. Other aspects remain confidential.

    “I can’t thank you enough for sending The Plan. It is clear and logical. Implementation would be relatively easy and I have little doubt, based on our customer surveys, that such a program would be effective.” Art Spinella, CNWMR

    “Frankly, your twenty points could not have made any more sense.” Gitas Jamekis, John Crane Inc.

    “Wow, Jim, this is amazing. Some of these ideas might just work, by God. And Mark LaNeve dismissed this? I have looked at the website, and there is a ton of interesting stuff in there.” Dan Neil, Los Angeles Times

    “Everything makes perfect sense in its appropriateness and simplicity.” Ed Garsten, Detroit News

    “So, the legend grows.” Ed Lapham, Automotive News

    “I think you hit the nail on the head.” Ed Wright, GM Plant Manager, retired.

    “It is a blessing to hear your thoughts about GM. Being a Nissan dealer, I have watched the company do a 180 turnaround because of vision and dynamic leadership.” Ben Keras

    “You remind me a little of the legendary Ed Cole.” Robert Harless, Preferred Media

    “First of all, let me say that I think you’re doing everyone a great service.” Jason Stoddard, Centric

    “Jim, just read your plan to return GM to Greatness. It all makes sense but how do we get the brass at GM to pay attention?” David Bruckman, Clay Matthews Auto Group

    “”I will gladly put your name on my proxy.” GMAC Branch Manager

    “I think it is the best thing to have happen to GM.” Anonymous, Bellagio Resort

    “Buickman – Who knows more about selling cars than just about anybody.” Jerry Flint, Forbes Magazine

  • avatar
    Rastus

    A superior product along with superior service “sells” itself.

    I.E., there is no NEED for a Buickman “salesman”.

    “Salesmen” do only one thing according to my philosophy, and that is “take”.

  • avatar
    Stan Esposito

    Well I must say GM did steal the NAIAS. The Aura the Silverado car and truck of the Year! The Camaro. The 2008 Malibu! The latest Cadillac! The Volt. They can’t be all wrong. I hope this does not get deleted because I do not agree with the wonderfully written article.

  • avatar
    mikey

    From all reports Buickman was a top salesman making some nice commisions.
    I never understood wht he isn’t selling Pontiacs or for that matter Hondas or Toyotas.

  • avatar
    airglow

    Robert Farago: January 12th, 2007 at 1:52 pm z31: False option set. Toyota, Honda, Nissan, Hyundai, etc. all invest in their future AND make a profit. Hey Bob, It appears the the Sonata has replaced the Taurus as the Rental Car of choice in the US. When is the Hyundai death watch series going to start? I just love it when a car that is universally liked by the Auto Press and Enthusiasts does a face plant!! Hyundai Sonata, the new Taurus!! Hyundai has taken up the slack for both the Taurus and GM's reduced fleet sales from the looks of most rental car lots!! I equally love it when a car the Auto Press and Enthusiasts hate is a smash hit. Jeep Compass anyone? How do all you Compass haters like your crow cooked. I've always preferred Avians at least medium-well to avoid Salmonella. 

  • avatar

    airglow: As I explained previously (somewhere up there), a temporary sales gain does not justify squandering a brand's image. The badge-engineered, TWAT-winning GM minivans were successful– at the beginning. But a minivan from the "Excitement" division? Even the staunchest GM supporter must agree that it was NOT a good idea. A Jeep that isn't a Jeep? Short term gain, long term pain. I don't see how you can say that the Sonata's done a "face plant." Sales remain strong. And while you're free to criticize Hyundai for putting cars into rental fleets, the percentage of their products in fleets is still a LOT smaller than GM's current 25%. [NB: Eye-balling the "look" of most rental car lots is not the most scientific of methods for estimating rental fleet content.] More to the point, Hyundai sales remained level in '06. GM's tanked by 8%. Hyundai is profitable. GM is so far from profit in the U.S. it's CEO won't even predict when it MIGHT generate positive cash flow. Hyundai's debt is under control. GM is mortgaged up to the eyeballs. If there's a face plant a comin', I don't think it will be Hyundai's.  

  • avatar
    Busbodger

    So how much of the EV1 development did we taxpayers fund? I’d buy an electric as my commute is maybe 20 miles a day. They would have to convince me that the battery life was reasonable and that a replacement would NOT warrant the replacement of the vehicle like so many of our gadgets these days.

    GM (or all domestics) is going to have to have to change their corporate culture from the dealers to the UAW to the top level management. If they can’t or won’t they ware doomed and rightly so. Repeat after me: small cars are not bad, small cars are not bad. Not everyone wants an SUV, not everyone wants an SUV. Maybe if they went under they (UAW, dealers, management) would realize that they have to change. This is not 1978 anymore.

    GM is going to have to move beyond marketting to the cowboys and muscle car gearheads. I’m not saying they have to turn their backs on the traditional customers but that GM needs to include new customers. Okay their big vehicles are good but their cars lag behind the competition.

    Run around and ask the import drivers why they bought imports. Those are all the topics GM needs to address. Dealer experience, durability, clever and intelligent design, safety, styling, ability to buy something not SUV or truck based… On the topic of styling – TO ME – Detroit seems to like the pumped up (bloated) muscular look (like a boxer). The imports seem to have a lean athleticism – like a mountain climber or a bicycle racer.

    The funny thing to me that GM has the import content in Europe that they could sell here and it has taken SO long for them to realize they can sell a wide portfolio of “world” products. I am so glad that Saturn is going to be the “import” division. Shame it took so long. I’d like to see GM combine all of their dealers into a single GM network where all dealers sell ALL GM products. Seems so obvious and would eliminate the need for all the rebadging. Oh – and use Saturn’s one price no haggle pricing.

    I really see the need for an electric in GM’s lineup but they will they will have to educate the average American consumer for this product to be understood. Alter their expectations b/c it is not a do-all vehicle. Americans seem to buy their vehicles for what they MIGHT task it with. Not a bad idea but as the cost of fuel rises as China and India b/c big consumers like America, it will become more and more important. Detroit ought to see this coming – everyone else does – and get some product lined up now.

    Put an American in a European compact or minicar (I’ve done this many times) and Americans tend to talk about it’s diminutive size and lack of horsepower and a relative spartan styling (if it is a basic city car). However after a while the intelligent design (value) of these cars becomes evident. They are simple to fix, cheap to purchase, cheap to operate (MPG, small tires), and usually clever designs to get the most out of their small size.

    As a kid of the 1980’s I saw the imports had really good engines first that would rev unlike the iron Duke GM 4 cylinder. Good weight to power ratios. Fold down rear seats so small sedans could carry longer objects. AM/FM/Cassette. Sunroofs. 5 speed trannies. Rear seat shoulder belts. Better interior lighting (on some). 4 speakers with fader control. Better handling and braking b/c of a leaner car design. More durability. Multi-port injection. Then later as Detroit was forced to change their designs they would attach little emblems on the trunk lid to brag about their high output engines, their fuel injection, etc. etc. To someone who had no experience with imports those might be very impressive features but to an import driver, these domestics were brand new and already out of date. They are still behind the curve. FINALLY a real hybrid on the horizon. FINALLY more gears for the trannies. FINALLY GM is going to move from the 1990s to the new century. I don’t want to pay top price for out of date technology that doesn’t last. However if I could buy a new mid-80’s VW Rabbit at a reduced price (design is paid for several times over) I’d do it b/c the design was good then and now, and they were durable. My ’84 Rabbit convertible was 10 yrs/190K miles old and we drove it from Naples to Rome, Italy at 160 kph many times. Sold it and it was still going strong. Should have imported it to the states when I came back to the USA.

    It makes me wonder if GM is just out of touch, if they don’t have the development budget due to high legacy costs, if they are trying to “put one over on us”, or if they just don’t care. Whatever the case if make me think I don’t want many of their cars.

    Got my fingers crossed for something with the Volt technology in it sooner rather than later…

    Chris

  • avatar
    Johnson

    More to the point, Hyundai sales remained level in ’06. GM’s tanked by 8%. Hyundai is profitable. GM is so far from profit in the U.S. it’s CEO won’t even predict when it MIGHT generate positive cash flow. Hyundai’s debt is under control. GM is mortgaged up to the eyeballs.

    If there’s a face plant a comin’, I don’t

    Actually, with regards to Hyundai, their global marketshare in 2006 actually dropped compared to 2005, and their US sales remained flat. Their profits also dropped.

  • avatar

    FYI- Cobasys has entered into a deal to develop batteries for the Volt

    linky

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