By on January 31, 2007

aerial_car_lot333.jpgI know it’s hard to believe that the world’s largest automaker is going down– especially when the company’s management swears up, down and sideways that revenues are up, costs are down and market share is stabilizing sideways. But understand this: GM observers will only realize the extent of GM’s peril retroactively. Meanwhile, it’s clear that GM is trying to follow the old English adage “When you’re stuck in a hole, the first thing you do is stop digging.”

Jerry Marks of the Auto Retail Informer reports that GM dealers will end January with nearly 1.1 million units on dealer lots. That’s roughly the same 80-plus days’ inventory level that preceded June ‘05’s Fire Sale for Everyone. Although GM has famously slashed production, they're still failing to cut their supply fast enough to match falling demand. Less charitably, they're still in a death spiral.

Given GM’s cash position, they can’t afford to shut down production for the month or so needed to clear the backlog. Alternatively and perhaps inevitably, GM could hold another clearance sale. A price blowout would spring clean the winter metal– and seal GM’s rep as the “come on down!” cut-price car company.

Another fire sale would also kill GM vehicles' residuals (again) and put the automaker right back where it can’t afford to be: a high-cost producer selling discount product. But what else can they do? Meanwhile, at the sharp end, GM dealers are suffering.

GM retailers are getting hammered by interest rates on their “floorplans” (unsold vehicles). To keep GM stores sweet, The General pays its dealers’ floorplan costs from day one through day 60 (standard industry practice). That’s all well and good when vehicles move off the lots in three months. When they don’t, as is the case now, dealers’ inventory costs soar.

To help GM dealers foot the bill for moribund metal, The General has agreed to pay roughly half the interest rate charges for vehicles still hanging around its dealers' lots, from day 61 to day 160. From day 151 onwards, any unsold GM vehicle is blessed with an additional $500 “consumer incentive.”

We spoke to several dealers who are unhappy with the new program. Stores who can’t afford to “age” their inventory for 150 days miss out on that $500 spiff. They claim this puts them at a competitive disadvantage. (A GM dealer’s deadliest competition is another GM dealer.)

What’s more (or less), many dealers complain that the program offers no short term help; they’re already stuffed with unsold ‘07’s and not a few ’06's. GM's program only applies to freshly ordered 2007 models– although it's good up to and including, wait for it, November 3.

One dealer described the program as a blatant attempt by GM to seduce its dealers into taking more inventory than they can sell. Even if you call it good business, sales channel stuffing has clear implications for GM’s bottom line. Well, they might be clear when GM eventually files its 2006 financial results.

According to GM CFO Fritz Henderson, the company is working on yet another restatement of earnings (that's seven restatements over the last eight financial quarters) and waiting for results from GMAC. Given that the recent sale of GM's finance unit to Cerberus must have been preceeded by some pretty rigorous due diligence, there are two possible reasons for the delay. Either GM's recent accounting kerfuffles resulted in understating GMAC's worth, or overstating it. If it's the latter, payback will be a bitch. 

I digress. As we’ve stated here many times before, GM’s story these days is all about [negative] cash flow– rather than earnings (or the manipulation thereof). And here’s the thing: while Henderson confidently predicted that GM’s '06 accounts will be back in black, the overall numbers will be distorted by many factors, including the booming Chinese market and current exchange rates (the relative strength of foreign currency helps GM).

But the most important factor to consider is GM’s cash pile and the dealer situation described above. That’s because industry practice allows GM to book all vehicles sent to its dealers as “sold.” So the real results– the amount of customer cash generated by new product sales– always lags behind the reported numbers by at least one financial quarter.

As GM launched its new[ish] high margin GMT900-based pickups at the end of the fourth financial quarter, you’d expect a big old positive blip. But if sales tank, if GM’s “sold” vehicles stack up like cordwood on the dealers’ lots, the blip becomes a bust, the cash flow dries up and, well, bad things happen. 

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102 Comments on “General Motors Death Watch 108: Stuffed?...”


  • avatar
    rohman

    The same ploy was used by the Case Tractor Company in the early 80’s. They piled product on their dealer’s lots, called it sold inventory and applied “profits” to the bottom line. Worked OK for a while but they were eventually bought for a song by FIAT AG.

  • avatar
    kablamo

    Even if GM made money last year (maybe I should just say “if it can be made to look like GM made money last year”), their position is nowhere near as good as Toyota, Honda, Nissan, BMW, and many others.

    Like this DW points out, the GMT900 release is going to provide a temporary boost to profits, but I see no indication they are turning the truck world upside down. How is that going to improve profitability next year? It won’t.

  • avatar
    CliffG

    Before all the GM’ers come pouring in here, note that GM is well on its’ way to ELEVEN straight years of negative cash flow in its’ automotive business. GAAP always presumes a sale ends in cash sooner or later, and if later never occurs (at least at the price originally expected), you have those marvelous “one time financial charges” to make up the difference. Ever notice how many of those our D2.5 tend to have? Management always tends to try to gloss over those little mega-billion charges, but they do/did represent real money at some point…What was it that Everett Dirksen said about billions?

    I also note that RF put in parentheses a core problem of GM, the fact that the greatest competition to a GM dealer is another GM dealer down the block.

  • avatar
    210delray

    This story should be required reading for the flagwavers on the Edmunds’ forums. They’re tripping over themselves proclaiming that GM is out of the hole and is on the way to profitability.

    Then, they keep dragging Toyota and Honda through the mud, repeating the old news about the “record” recalls for the former and the transmission woes of the latter.

    What’s really hilarious is one of the most ardent GM-firsters is trying to defend the new Sebring, of all things!

    And Cliff, you reminded me, one poster even mentioned that without those pesky one-time charges, GM actually made money in 2006. Yeah, like such charges can be swept under the rug — it is real money.

  • avatar
    Colinpolyps

    I have said before it’s the $1200 to $1400 added cost for pensioners helalth care benefits that’s the real problem. Tag that to the cost of your goods and you have either over priced vehicles or bankruptcy looming. Thank you UAW you have just strangled the golden calf.

    Further complicating this nest of snakes is the impossibility of increasing market share when the main competition is a fellow dealer.

    The fire sale will soon begin–but these cars will have to be damn cheap to lure back the hordes now driving Oriental quality.

    As we say on the the street, “they’e pretty much f&*#ed”

  • avatar
    mikey

    Sooo a good chunk of the media believes GM is emerging from the swamp,and others have a different view.Fair enough.
    I think we need to ask ourselves some questions
    1 Is GM in a better place than a year ago?
    2 Is GM still number one?
    3 Has GM done huge cost cutting?
    4 Has GM stock price increased from Feb 2006?
    5 In the past year has Toyota seen some negative press?
    6 Has GM put the bankrupt rumours to bed?
    7 Has GM quality improved backed with a 100,000 mile warranty?
    8 Last year the DELPHI situation was gonna kill GM,Is it gonna kill GM IN 2007?
    If you ask your self honestly, will GM come out of this?
    The only sensible answer is yes.
    If GM improves as much in 07 as it did in 06,where will GM be in 09?

  • avatar

    mikey:

    What’s your take on the specific points raised by this editorial?

  • avatar
    86er

    Not wanting to get into the tired old domestic v. import debate either, I will agree with RF on the GM dealer situation.

    Where I live, GM products are 45% of the market, but the three GM dealers in town see each other as the main competition. I should know, I worked for one of them.

    A few of my sales at this dealership were the stock “oh, I can get this Grand Prix for $xxx down the street at X Chevrolet dealer” and we undercut them to get the sale.

    Mind you, our bread and butter was Optimum, and everybody knows the money is in used.

  • avatar
    oboylepr

    Sooo a good chunk of the media believes GM is emerging from the swamp,and others have a different view.Fair enough.
    I think we need to ask ourselves some questions
    1 Is GM in a better place than a year ago? NO
    Won’t ev2 Is GM still number one? Just Barely but not for much longer
    3 Has GM done huge cost cutting? Very little in real terms
    4 Has GM stock price increased from Feb 2006? So what?
    5 In the past year has Toyota seen some negative press? Wont even slow the juggernaut down
    6 Has GM put the bankrupt rumours to bed? Absolutely NO
    7 Has GM quality improved backed with a 100,000 mile warranty? Smoke and Mirrors, has not changed anything
    8 Last year the DELPHI situation was gonna kill GM,Is it gonna kill GM IN 2007? It could
    If you ask your self honestly, will GM come out of this?
    The only sensible answer is yes. Not a chance
    If GM improves as much in 07 as it did in 06,where will GM be in 09? China!

    Sorry Mikey but you are an eternal optimist. The hard data does not back up your position. That said, I wish you were right.

  • avatar
    Seth

    This story should be required reading for the flagwavers on the Edmunds’ forums. They’re tripping over themselves proclaiming that GM is out of the hole and is on the way to profitability.

    delray, for that you ought to check out http://www.gminsidenews.com/forums/

  • avatar
    86er

    Seth et al., you’ll find this link more germane to the discussion at hand:

    http://www.gminsidenews.com/forums/showthread.php?p=921509#post921509

  • avatar
    mikey

    Specific points RF?
    OK 80 day inventory, not outragous, not good either,but not umcommon.Cash on hand? 24 billion thats a chunk of change.
    I don’t begin to understand GMs relationship,financial or otherwise,to its dealerships.Having said that I don’t see many dealers here in Ontario going belly up.
    CFO Fritz figures, your better off delaying the news.[good or bad] rather than getting it wrong.The lesser of two evils,so to speak.
    I fail to see the logic in your statement, GM can’t afford to shut down for a month to clear the back log?
    Of course they can,GM and every other car company has been doing just that for years.If your selling 6000 cars a month and building 8000.Shut er down one week a month, short term problem solved.
    If the problem persists, and you still can’t sell cars.slow the line down.This aint nothing new been going on as long as I can remember.
    All I’m saying is Feb 2007 looks a helluva lot better than Feb 2006.Let just see what unfolds

  • avatar

    It’s really sad to read sites like the one posted by 86er; kind of like having a mentally challenged person in the family. No one wants to admit the disease that GM has is widespread in American industry. When corporate compensation and the tax laws are totally biased to short term gain, the rule is set; any but the most bold executives in the U.S. would be viewed as crazy to do some real strategic planning. Their job is not to produce product, it is not to keep workers working (or happy with their jobs), it is not to ensure the stock is a long term value, or even to do what they can to make the company survive; the job, as defined by the stockholders, is to spin the truth so that the stock price is not sacrificed to the realities of the marketplace. GM, Ford and DC have all shown they can produce brilliant vehicles, but none of them have the commitment to put them over the top. The CTS – an incredible chassis saddled with ridiculous “styling” and crap parts-bin interior pieces. The LS – another superb chassis which may well have put Lincoln back into the luxury market that exists today, but it simply sat on the shelf waiting for help and selling at incentivized pricing. The 300 and Magnum both are competent platforms looking for an interior that wouldn’t embarass a VW Golf.

    But look at the Corvette, or the Ford GT! Both show the world-class abilities of world-class engineers and designers. These glimpses of light only make the story more tragic.

    The problem is not a lack of talent among the 2.5; it is the result of 40 years of spin and lack of executive courage.

  • avatar
    Justin Berkowitz

    edgett:

    I assume you’re talking about the first generation CTS? The new one, from the photos from auto shows, looks pretty sharp to me and certainly not parts bin.

  • avatar
    KixStart

    …GMInsideNews.com… and the Deathwatch 108 post there…

    Funny. That thread didn’t last long, one of the site admins has already locked it, saying, “screw this…”

    Even if one doesn’t care for TTAC’s point of view, one must agree that TTAC has more class than some.

  • avatar
    nino

    Nice fellows over there.

    Ooooof!

  • avatar
    nino

    I fail to see the logic in your statement, GM can’t afford to shut down for a month to clear the back log?
    Of course they can,GM and every other car company has been doing just that for years.If your selling 6000 cars a month and building 8000.Shut er down one week a month, short term problem solved.
    If the problem persists, and you still can’t sell cars.slow the line down.This aint nothing new been going on as long as I can remember.
    All I’m saying is Feb 2007 looks a helluva lot better than Feb 2006.Let just see what unfolds

    But by slowing down the lines, don’t you lose the efficiency that the line is designed for? By doing that, I feel you’re winding up with fewer even MORE expensive units.

    And wouldn’t the same be true of shutting down the line one week a month? Other than your direct material costs, where else are you saving? Your land, insurance, benefits costs are the same and don’t change whether you’re open or not.

    What is needed is for the lines to have manufacturing flexibility where they can easily be converted to produce other, more popular car lines.

  • avatar
    nino

    To be a little fair, GM is FINALLY putting their best engine, the 3.6 liter DOHC V6, in pretty much all of their car lines. Pairing this with the 6 speed automatic transmission will at least make it possible that those units languishing in dealer inventory will have a decent enough powertrain if somebody decides to get one at discount.

  • avatar
    Terry Parkhurst

    As the Valley Girls (and now most teens) used to say, “Oh my Gawd!” Isn’t the General introducing the 2008 models in a few weeks – or now? I loose track from the olden days when it was September – then, March – before a new model year rolled into the dealer showrooms (and back lots).

    I never thought I’d feel sorry for car dealers; but this sure does make me feel that way. No wonder that the financial manager and two salesmen from Huling Brothers in West Seattle, WA sold a “mentally-disturbed man” (as he was described in each Seattle daily paper) a GMC truck for $30,000 then, as they used to say in the old days of The System “moused him, front and back.”

    But wait, there is indeed more.

    When the guy ended up in the hospital – after a police officer, responding to a noise disturbance, noticed fecal matter on the floor of the guy’s apartment – he contacted his pal at Huling Brothers. It seems he was afraid that his truck would get towed.

    His “pal” took more money, to pay purported tow fees, etc. etc. – this was all in cash, so far – and got the truck back. Then, assuming there was more money, back at the apartment, the finance manager and two salesmen, broke in, rummaged through the place and found about $50,000, in cash.

    Then, to add injury to injury, the poor bugger was evicted, whilst still in stir.

    Somehow, word came out – word up! – and recently (this story started last summer) the perps were arrested. Word got out – nope, won’t do that old Cameo thing again – in the newspapers and, despite the fact that the dealership had changed hands again, one of the Huling Brothers gave a check for the entire sum taken – about $80,000 – to a deputy prosecutor, for safe keeping, until the guy in the hospital is released – hopefully, with someone to watch over his affairs and money.

    So that’s how desperate one GM dealer’s people got. It was indeed a GMC Truck dealership.

    Maybe it’s time for David Letterman to send Rupert into a GM dealership, acting like a “mentally disturbed man.” (No, Robert I am not doing that for TTAC.)

    But seriously folks, let’s hope GM survives long enough to build the Chevrolet Volt; if for no other reason than that it would make a neat collectible.

  • avatar
    Luther

    When corporate compensation and the tax laws are totally biased to short term gain, the rule is set; any but the most bold executives in the U.S. would be viewed as crazy to do some real strategic planning.

    You make a good point edgett. This is mostly due to SEC “laws” that mandate quarterly reporting. The “law” encourages hiring quarterly song-n-dance men at the top. These buffoons get tiresome and obnoxious like a bad Vaudeville act and also borderline fraudulent. It takes many years to turn around a company like GM and at the same time you dont want to scare off [quarterly] investors since Executive pay is tied to Stock performance.

  • avatar
    jthorner

    In general the way floorplan financing is set up is that a financial institution (bank) provides the cash for paying off the manufacturer and the dealer pays this bank interest on that loan until the car in question is sold off, at which time the dealer pays of the bank. Just to make it more convoluted, the manufacturer often subsidizes a portion of this interest, say for 60 days. Basically the dealer takes out a short term interest only car loan with a baloon payment due when the car is sold to a retail buyer. Said buyer most often borrows a large fraction of the price of the car from a bank, maybe even the same one which lent the money to the dealer to buy the car from the manufacturer.

    That said, the manufacturer gets the bulk of their cash in whatever the payment terms time is after shipping regardless of when a retail customer takes delivery. Of course sometimes the finance subsidiary of the manufacturer is taking on the role of the bank, and the finance subsidiary is then often selling short-term debt onto the markets backed by these dealer receiveables. In either case, shutting down the factories for any period of time creates both a sales and a cash hole for the manufacturer.

    Personally if I were the federal regulators I would require all automotive and similar companies to only report sales when an end customer sale is delivered, but that isn’t how the rules work.

  • avatar
    virgule

    All of you missed the really interesting thread over at the GM site:

    http://www.gminsidenews.com/forums/showthread.php?t=43810

  • avatar
    Dr. No

    Remember, it ain’t just the floor plan interest that hurts; other costs of holding excess inventory (lot boys, insurance, storage) exacerbate the pressure on profits.

  • avatar
    Captain Tungsten

    The first point made here was: “GM has 80 days inventory in January. They might clear it with a fire sale”. But GM had 80 days inventory LAST January (and in June ’06 as well….) Didn’t need one then, why expect one now? Why imply that somehow things are worse now then they were a year ago? And also, don’t forget that inventory levels have remained fairly constant (bouncing between 1.0 and 1.1 MM units) even though the corporation has been pulling significant volume out of daily rental, and has also taken steps to reduce the number of vehicles it churns through it’s company vehicle programs. That is real, demonstrable progress.

    And GM increases support to dealers floorplan costs, and that’s a bad thing? I’m sure it’s not that tough to find a few pissed off dealers to try to help make your points. But I’ll believe there is a general dealer problem when LaNeve is sent packing (ala Joe Eberhardt).

  • avatar

    Captain Tungsten: Keep in mind that the 80-day inventory figure includes sales to rental fleets, which must go through a dealer, which only takes a few days. The "actual" inventory figure would be closer to 100 days. (I've talked to dealers with 145+ days supply.) Also, GM's market share has decreased over this time. As for GM's 120k first half of '06 fleet reduction (see: today's post), you're right: it's the right thing to do. On many levels. But this is not long term thinking. GM's shutting down factories because of lost retail market share. The rental shutdown is a welcome by-product.

  • avatar
    Groovdog

    Almost 2 years and not bankrupt. I would be happy to bet any taker (I need to send my kids to college) that 2 years from now we will be on GM Deathwatch 200+ and GM will still not be bankrupt.

    And a single month for a DSO calc is crazy. Use a 3 month moving average at least. 1100K units would be the 2nd lowest Jan month end inventory total in 5 years.

    The real issue is too many dealers as each as has to have vehicles and the competition between GM dealers is killing those dealers while degrading the product (it becomes a bidding war, dealer against dealer rather than about a product).

  • avatar
    frontline

    I see a potential winner in the new Outlook, Enclave and Acadia. Spot on for families with 3.5 children or less that can`t stomach a minivan or a big truck.

    It would be so neat if they could be a little hard to get and stay that way for 2 years.

    TheGM dealers that are just 5 miles apart can make money on a vehicle that is desirable and a little scarce.

    Why is that De Beers are the only distributors that really understand this very successful concept ?

  • avatar
    jerry weber

    the question with gm and all the US companies is, are they making money on the sales of whatever new lower level they have tumbled to? If they are profitable at half their old size, they survive. If you say that they still lose money on every car they sell, then losing less because you build less is still no model for the future. The American companies must build at the same cost as everyone else, and then they must market more efficiently (ie less dealers) and then they must have a constantly improving product line to stay in the game. With gm, I believe this is impossible as long as they build as many different models as they do now. Toyota, who will pass gm has exactly two types of dealers in the US. toyota and lexus. They also have far fewer stores to compete with each other. Check the average number of monthly sales for each brand and see who has profitable high volume dealers. Toyota dealers do over 100 new per month. Buick I believe sells 8. You can't go on like that, it doesn't justify having that seperate brand, dealers, parts, advertising, developement etc. for that small of a division. gm cannot sell even the same amount as toyota in the US with 5 divisions to their 2. (Owe I missed GMC) sorry.

  • avatar
    andyinsdca

    From virgule’s link:
    Hey-we are building them so you have them on the lot. A lot of saturdays are scheduled and even the vacation down period is being set aside to build new Cobalts & G5s. I hope you are selling them and not stock piling

    HAHAHAHAHA! I guess they didn’t hear the adage about stopping digging.

  • avatar
    Captain Tungsten

    RF:

    Re: days supply vs. units on the ground: If you are correct (and I’m not disputing that poing), it will quickly become evident in the inventory reports, since, for a given inventory level, the reduced daily sales rate will increase days supply.

    Re: shutting down factories; actually there are multiple reasons, lost share is only one. (You can look at it another way, share never claimed e.g. minivans, Doraville never had a chance with the product they were building, original vans were nice products, but too small to be competitive in the US because they had to be engineered for Europe, where they also failed)

    Improved productivity is another, migration of manufacturing out of the US and Canada is a third (e.g. new Mexico assembly plant, import of Daewoo, (soon) Opel, and (formerly) Holden vehicles.

  • avatar
    Glenn A.

    If the “real issue” is too many GM dealers (and I grant you, it IS “one of the issues” dragging GM down), then obviously it would benefit GM and the surviving dealers to lose a portion of their dealers.

    Let’s look at it another way. In 1962, at it’s zenith, GM had 51% of the US automobile market, with Chevrolet having probably 1/2 of that or 1 of 4 cars sold in the US, approximately. VW had about 5% of the US market alone, and the rest of the imports made up maybe 2% of US sales in total. Merely a boil on GM’s toe.

    Now, in California, I understand that non-US brands make up over 50% of retail sales. I also understand that however California goes, thus goes the rest of the country in these matters, within a few years to a decade. Right? Right.

    So, going back to GM, we have almost (less Oldsmobile) the same size dealer network for Chevrolet, Pontiac, Buick, Cadillac and GMC – PLUS Saturn dealers, compared to 1962, yet the total US market penetration for GM (including fleet sales) is about 25%.

    The math does not add up well, to say the least, does it? Taking into account the (rapidly reducing) number of and (changing) purchasing habits of the pro-GM crowd, little wonder that GM dealer’s worst enemies are other GM dealers.

    And some folks can’t see how GM could potentially collapse?! GM have essentially sold off all of the family jewels, silver, anything profitable, anything not bolted down and pin their hopes for the future on a 50% owned communist Chinese operation, and pro-GMers are saying “don’t worry, be happy”?! It boggles the mind.

    GM, at the least, need to lose the GMC franchises, Pontiac franchises, probably Buick franchises and certainly Saturn, which has never made GM dollar one profit ever, and dump Saab at a fire-sale price just to get one more millstone from around their neck.

  • avatar

    "A lot of saturdays are scheduled and even the vacation down period is being set aside to build new Cobalts & G5s." From the Warren, OH Tribune-Chronicle in an article about the Lordstown assembly plant, where Cobalts are built: New work techniques and equipment has helped the complex cut losses to an estimated $1,000 or more per Cobalt — less than it lost on each Cavalier — but GM is pushing profitability as one way to decide where to assign vehicles. So they're losing $1K on each Cobalt they build but they're taking "saturdays … and even the vacation down period" to build more. Am I the only one who sees something inherently wrong in this business plan?

  • avatar
    seldomawake

    Frank:

    Right! See, this is what bugs me: something isn’t adding up. I’ve asked this before: where’s the disconnect?

    Another thing that just doesn’t add up: the band continues to play while the Titanic sinks.

  • avatar
    Glenn A.

    I recall reading a story about the last days of American Motors when Castang (sp?) from Renault was at / near the helm of the US / Canadian operations.

    Most folks don’t recall that AMC contract-built Chrysler/Dodge/Plymouth rear drive cars at Kenosha alongside the AMC (Renault) Alliance (Appliance?) and hatchback version, the AMC Encore (Eyesore?)

    Castang apparently said to the executives in a meeting “well, I have good news and bad news. Alliance sales is down, which is bad news, but since we lose money on every one, that’s actually good news!”

    And so, just where is American Motors today? Point taken?

  • avatar
    Groovdog

    GM has 33% of the US dealer base and about 18% of retail sales. GM (as with most OEMs) dealers do very little fleet (sub 5 vehicle fleets mostly). Dealer base needs to get cut in 1/2 especially on the coasts.

  • avatar
    Fred D.

    “I have said before it’s the $1200 to $1400 added cost for pensioners helalth care benefits that’s the real problem.”

    The problem is that GM underfunded their pension when times were good. It’s not some “competitive disadvantage”, it’s mismanagement, pure and simple.

  • avatar
    Groovdog

    Actually GM’s pension is $17 BILLION overfunded. Its healthcare which is pay as you go and is not required to be funded under ERISA.

    And healthcare wasnt even required to be shown on financials until the early 90s (remember last time GM lost $20b?). This is an issue in governement right now as the state and local governements are just waking up to the fact that they owe A LOT of money to retirees (to the tune of $1-2 TRILLION. The problem is far bigger than just GM, they are just symptomatic of our larger societal issues.

  • avatar

    Groovdog:

    U.S. franchise laws means that GM can’t cut its dealers. Killing Oldsmobile cost them billions.

  • avatar
    Johnson

    So GM inventory remains about the same as last year … how exactly is that a good thing? Real progress would have been a lower inventory level than last year, but we can see that is not the case.

    There was a recent news story about how some GM dealers still had unsold 2005 models on their lots.

    And sure 80 days inventory level is “common” (among the American Big 3), and all 3 also happen to be in tough situations and having a lot of problems. If you compare the 80 day inventory level to Honda or Toyota, then it definitely is not “common”. Toyota’s inventory level for their vehicles on average hovers around 30 days, and for Honda about 40 – 50 days. Those numbers are significantly better than the “common” 80 days of inventory.

    One dealer described the program as a blatant attempt by GM to seduce its dealers into taking more inventory than they can sell.

    Hmmm, reminds me of another company that did something similar … I think they go by the name of Chrysler. Look at the mess that turned into.

    The GMT-900s are not selling all that great either. Some models are seeing increased sales, while some are seeing dropping sales. Overall mixed results, and certainly not what GM was claiming would happen.

  • avatar
    vitek

    Reminds me of the joke going around Detroit before American Motors was bought out. AMC wasn’t a business- it was a hobby, as IRS rules required you to make a profit in at least one out of the last five years. If not, it was presumed you were trying to run hobby expenses through a fake company.

  • avatar
    cheezeweggie

    So they are losing $1,000 per car at Lordstown and that is a good thing ? Only in America. Now lets negotiate higher wages.

  • avatar

    So they are losing $1,000 per car at Lordstown and that is a good thing ? Only in America. Now lets negotiate higher wages. The amazing thing is that they're proud to be losing less on each Cobalt than they did on Cavaliers. Considering how long the Cavalier was in production and how many of them they built, just how much did they lose on it?  And how could they lose  money on a model they didn't make any substantive changes in for years, when the tooling and design costs should have been paid for after the first few years of production? I guess it didn't really matter that much to them at the time since the obscene profits on SUVs and trucks kept everything afloat. But their cavalier attitude towards production costs then are really biting them in the ass now!

  • avatar
    airglow

    GM’s Credit Default Swaps, financial instruments bought as insurance against GM defaulting on its bonds (Ch 11 Bankruptcy) are the cheapest they’ve been in several years. Translation; the world’s highly efficient, highly liquid debt markets think GM is in the best shape, with their lowest chance of Bankruptcy since before the GM Deathwatch series began.

  • avatar
    skor

    RE: Glenn A.,

    Foreign branded cars must have a much higher market share in California than 50%. The foreign branded cars have taken about 70% of the market in New Jersey.

  • avatar
    airglow

    Jerry Webber:

    Toyota, who will pass gm has exactly two types of dealers in the US. toyota and lexus.

    Um, make that three, Scion.

  • avatar
    airglow

    Groovdog:
    February 1st, 2007 at 11:50 am
    GM has 33% of the US dealer base and about 18% of retail sales. GM (as with most OEMs) dealers do very little fleet (sub 5 vehicle fleets mostly). Dealer base needs to get cut in 1/2 especially on the coasts.

    I love this armchair, anecdotal analysis.

    I work in a town 45 minutes from the next closest car dealers. This town has a lone Chrysler/Jeep/GMC combo dealer. Guess what kind of cars and trucks a huge percentage of local residents drive? The market share here of Sebring’s has to be the highest in the US outside of a Thrifty rental lot. There are some advantages to having a large dealer network. But if you live in Suburban LA with you head stuck up your ass you’d never know it.

  • avatar
    windswords

    Frank Williams:
    February 1st, 2007 at 10:32 am

    “So they’re losing $1K on each Cobalt they build but they’re taking “saturdays … and even the vacation down period” to build more. Am I the only one who sees something inherently wrong in this business plan?”

    Frank et. al., could it be that GM made both the Cavalier and now the Cobalt at a loss for the CAFE credits? That way they can sell their more profitible but less fuel efficient large cars (and trucks?) for a profit. This has been done before. I remember one of the goals of the Neon for Chrysler was that it would turn a profit, meaning that the previous generations (Saundance & Shadow, and the Omni & Horizon before it) did not.

  • avatar
    jerry weber

    airglow: Where I live scion is a sub set of toyota sold in the toyota store, maybe they have independent stores in other places but not in Pa. So they didn’t increase their costs that much to market scion in an existing toyota store. That being said GM has consolidated their franchises and there are few stand alon buick stores. The problem now is the model proliferartion will drive a multi-franchised domestic dealer nuts. How to inventory so many differen kinds of products? We have at home a chrysler, dodge, jeep dealer. How would you like to have twenty some models with all their variations in stock? And if you don’t that’s the one the customer out front is looking for. As Farago says you can’t let these franchises die by cutting product say dodge cars or pontiac & buick. So you badge engineer onward losing money and weakening the dealers along with the factory.

  • avatar
    Glenn A.

    Scion don’t have a stand-alone dealer network, to my knowledge. They’re sold within Toyota stores.

    airglow, yeah, I agree with you in that some small towns (such as Honor Michigan) have a single new-car dealer. The one there happens to be Dodge-Chrysler-Jeep. It also sold Suzuki’s in a dealer near a larger town, but then the local Chevrolet dealer bought it all up and closed Suzuki – drove past on the way home from work on a Friday, Suzuki dealer. Drove past on Sunday to go to town for some shopping – what the?!?! No Suzuki dealer, totally empty lot, not even any used cars. Curiousity got the better of me. I drove onto the lot, got out, looked in the store. Waste paper baskets had trash, plants standing there in pots, paperwork on desks. No cars. Everything, gone. Jobs, gone. Pretty dumb in a way, since Suzuki’s sales is up like 27% on the year. But hey, if you can’t beat ’em, buy ’em and close ’em I guess.

    Historically speaking, in fact, Studebaker managed to “hang on” until 1966, because it had little mom & pop dealers in small towns. Kaiser-Jeep, too.

    Interestingly, Toyota and Nissan started out using such a strategy in the 1960’s. “Nobody” selling “real” cars wanted to handle these weird Japanese things from a nation the great big bad-ass US of A had kicked in the hiney in a war. A lot of used car dealers in smaller towns are now millionaires.

    Perhaps this is how the Chinese or the Indian car manufacturers will start out in the USA.

  • avatar
    Glenn A.

    My short take on what GM needs to do to survive in North America, after watching the auto industry with high interest for about 40 years.

    1) Cut down to Chevrolet and Cadillac, only, in NA. Even if the company has to go through Chapter 11 to do it. To make it more equitable for all GM dealers, and to improve the remaining dealerships, pull ALL GM franchises and only re-assign Chevrolet and Cadillac dealerships to the BEST dealers in any given region. Doesn’t matter if they used to be a Saab dealer, Saturn dealer, GMC dealer, Hummer dealer, Chevrolet dealer, Pontiac – Buick dealer or what.

    2) Close out the plants which are not in the top 30% of efficiency, low production costs and flexibility. Make the remaining plants into flexible production plants. Do it within 60 days, so as to not let the dealers run out of product. Introduce new product, but only introduce it once it’s RIGHT.

    2b) Resurrect some of the dead brands’ better cars as a Chevrolet, such as the Toyota built Pontiac Vibe (becoming the Chevrolet Vibe), and maybe Saturn 2 seater.

    3) Stop producing low quality product! Toyota and Honda, Subaru and even Nissan, Mitsubishi, Hyundai and Kia can and do build a better product than GM on the whole. It’s not brain surgery, FIGURE IT OUT AND DO IT.

    4) Adopt the Toyota methods of actually helping suppliers to make a profit AND reduce costs only if possible, instead of brow-beating the suppliers into bankruptcy.

    5) Take the extra money from the pension plan and plow it into the medical plan for retirees. Tell the pensioners, hey guys, this is reality. There’s only so much money to go around; we screwed up and are taking the hit for it now and unfortunately, so are you.

    6) With this in mind, take a new broom and replace most of the executive ranks, with just enough of the current, best executive ranks left over to carry over some of the better parts of GM corporate culture (assuming same exists).

    7) Tell the UAW and CAW – we have got this many jobs here, here and here. We want flexiblility to run our own plants and place people where they’re needed. Either sign on with this,
    -or- we simply move our machinery to China, South Korea, Brazil, Mexico and import. And mean it. No bluffing.

    8) Lose the “talk, talk, talk” culture of “well, our NEXT cars are the ones that are going to be better” (i.e. we know our cars suck) and just make good cars, or nothing at all in any given segment.

    9) Put a REAL bumper-to-bumper 10 year 100,000 mile warrantee (not “oh, sorry, the brake rotors warping aren’t covered – it’s in the fine print” sh!t like what finally drove me away from GM over an $80 bill on a 2 year old Cavalier). Make sure the dealers actually back it up. Oh yeah, include all oil changes, servicing and maintenance as part of the price of the consarnat vehicle right through 10 years 100,000 miles, so there is no excuse on anyone’s part. Won’t this by God be an incentive to make the cars right the first time? YES.

    If GM can’t build a car to withstand that, then GM should close up shop, roll over and die. Modern cars should be able to go 250,000 miles. Many Toyota Corollas and Honda Civics can, and do.

    10) Send the shell-shocked, remaining dealer network employees to customer training courses, and adopt Saturn-style fair pricing for all across the new, smaller Chevrolet and Cadillac dealership networks. Then, ONLY BUILD CARS WHEN ORDERED FOR SALE BY DEALERS OR INDIVIDUALS.

    30 days of inventory on the lot, MAX, 15 days MIN.

  • avatar
    Steve_S

    So if you can’t cut a brand or dealers without spending billions what is the best way to reduce the number of outlets? They will need to offer some type of buyout as an incentive for a dealership to close.

  • avatar
    nino

    U.S. franchise laws means that GM can’t cut its dealers. Killing Oldsmobile cost them billions.

    So, is GM’s plan to starve them of product so that they go under by themselves?

    Frankly, there are a few family owned dealers here by me where the real estate the dealerships sit on is worth more than the franchise.

  • avatar
    airglow

    Steve_S:
    February 1st, 2007 at 3:45 pm
    So if you can’t cut a brand or dealers without spending billions what is the best way to reduce the number of outlets? They will need to offer some type of buyout as an incentive for a dealership to close.

    Exactly how GM is doing it. They are trying to force GMC/Pontiac/Buick together by making all three niche players with fewer products adding up to a full line between the three brands. GM bought out Olds dealers and it was so expensive they will NEVER do anything like that again.

  • avatar
    Sanman111

    Well, this is another way that badge engineering is killing GM. Not only are chevy dealers competing with each other, but they are also competing with badge engineered GMCs, Pontiacs, etc. What GM needs to do is localize supply of a given vehicle to one local dealer and starve the others of that product. So, one dealer in town has suburbans in stock and the others don’t. A second dealer has a lot of Cobalts and the others don’t. That will reduce price cutting between dealers.

  • avatar
    willjames2000

    Johnson;

    The GMT-900s are not selling all that great either. Some models are seeing increased sales, while some are seeing dropping sales. Overall mixed results, and certainly not what GM was claiming would happen.

    In fact, from Reuters 2/1/2007:

    “GM posted higher sales for its recently introduced pickup trucks in January, including an 11 percent gain for the GMC Sierra and nearly 6 percent gain for Chevrolet full-size pickups
    Retail sales of GM’s new pickup trucks were up 7 percent in the month, the company said.”

    AND

    “Sales of its market-leading F-series pickup trucks were down 15 percent in the month.”

    So contary to your assertions, the GMT 900s look like a success-story so far.

  • avatar
    willjames2000

    Glenn A

    Thanks for your “short” take. So much to chew on here, but so little time. Let me just say this. An $80 bill for brakes sent you away from GM? On what, a $14,000 car? If I gave up on any product any time it cost me as little as one-half of one percent to maintain or repair I sure wouldn’t be using much of anything, including the “top-rated” Dell computer I’m writing this on.

    Also, as for your suggestion to “ONLY BUILD CARS WHEN ORDERED FOR SALE BY DEALERS OR INDIVIDUALS” that is exactly the way GM does it. Nothing is built without a dealer or fleet order (other than a few exec cars). Unlike DCX, they do not maintain large pools of unsold inventories.

  • avatar
    kasumi

    willjames2000

    I gave up on VW after my car was at the dealer for 2 days. The toal charge was zilch. The dealer experience was bad enough that I we traded-in the car within a month. Companies lose customers all the time for less or more than $80 frustrations. Its everywhere in the automobile industry from the highest to the lowest end.

    K.

  • avatar
    nino

    Thanks for your “short” take. So much to chew on here, but so little time. Let me just say this. An $80 bill for brakes sent you away from GM? On what, a $14,000 car? If I gave up on any product any time it cost me as little as one-half of one percent to maintain or repair I sure wouldn’t be using much of anything, including the “top-rated” Dell computer I’m writing this on.

    Obviously, you didn’t understand the gist of the post.

    Or do you feel that there shouldn’t be a sense of outrage when you spend good money on a new car and expect that any defects that are uncovered on the car be fixed without requiring an extra cost?

  • avatar
    nino

    One of the more bulls**t charges I ever got from a dealer was a $100 to “reflash” the computer because of a warning light that was on.

    Under warranty

    Pontiac Grand Prix.

  • avatar
    willjames2000

    nino:

    Brakes. 2-year-old car. $80. Maintenance Item. Understood.

    No miles posted, How was it driven? I suppose you’d complain about a $20 charge for an oil change too? Glenn A would cause, according to him, it all should be included. For 100,000 miles. I can even hear the Toyo execs laughing at that one.

  • avatar
    LastResort

    willjames2000, way to pluck choice quotes from an article. If you read the next couple of paragraphs about the Truck sales you find:

    GM trimmed its planned first-quarter production in North America by 3.6 percent from its plan of a month earlier, cutting expected output by 40,000 units to 1.08 million.

    GM said it was making the production cut in conjunction with an earlier announced move away from low-margin fleet sales and a need to manage inventories.

    “For us it was not a great sales month, but we’re doing okay, and more importantly we continue to execute according to plan,” said GM’s chief sales analyst Paul BallewThere should always be a bump in sales following the release of a new vehicle, especially when people have known for more than a year that a new vehicle was coming. They haven’t said it’s a success yet. I’m waiting to see what happens over a longer period.

  • avatar
    nino

    I really feel that you can’t express yourself properly on a computer and that in many ways, this is a terrible medium.

    Maybe because of similar experiences with having to pay for defective parts for a car under warranty, I took his meaning completely different than you did.

  • avatar
    willjames2000

    LastResort:

    Yea, it’s way too early to call them a success. And January sales are traditionally slow so hard to plot a pattern from.

    But I was responding to assertions that GMs truck sales were dissapointing. On the contrary I think that a 7% up versus Fords 15% down is a good start.

    And the production cuts are corporate-wide, and attributable to GMs goal of reduced rental-fleet sales, not for the GMT 900s which are not often in rental fleets anyhow.

  • avatar
    skor

    RE: Glenn A Also, as for your suggestion to “ONLY BUILD CARS WHEN ORDERED FOR SALE BY DEALERS OR INDIVIDUALS” that is exactly the way GM does it. Nothing is built without a dealer or fleet order (other than a few exec cars). Unlike DCX, they do not maintain large pools of unsold inventories.

    That’s not how it works. If a dealer wants a Corvette, he’s got to order 10 Malibus along with it or he knows he’s not getting the Vette.

  • avatar
    willjames2000

    skor:

    “If a dealer wants a Corvette, he’s got to order 10 Malibus along with it or he knows he’s not getting the Vette.”

    And you’d know this how?

    The fact is I have it from a VERY reliable source that GM’s product allocation is controlled, but mostly “turn and earn” for high demand, low availability product like Corvette. You have to sell one to get one, and the faster you sell it, the faster you;ll earn one, then two, then more. At GM there are no “gotta takes” in order to get anything.

  • avatar
    nino

    The fact is I have it from a VERY reliable source that GM’s product allocation is controlled, but mostly “turn and earn” for high demand, low availability product like Corvette. You have to sell one to get one, and the faster you sell it, the faster you;ll earn one, then two, then more. At GM there are no “gotta takes” in order to get anything.

    Ramp Chevrolet in Nesconsett, NY, presently has over 75 Corvettes in stock and another 8 were being delivered today.

    All colors, all models, coupes and convertibles available.

  • avatar
    willjames2000

    Nino

    He’s among the biggest Chevy dealers in the Northeast and he gets ’em ’cause he sells ’em, NOT because he takes Malibus or anything else, including his GM rep to dinner. Believe me.

  • avatar
    nino

    He’s among the biggest Chevy dealers in the Northeast and he gets ‘em ’cause he sells ‘em, NOT because he takes Malibus or anything else, including his GM rep to dinner. Believe me.

    I’m not arguing your point, but what would prevent a dealer like him to refuse certain models and only keep desirable models in inventory?

    If you consider his ‘Vette stock, it would seem to me that he could call the shots on anything else as well.

  • avatar
    Johnson

    So contary to your assertions, the GMT 900s look like a success-story so far.

    Re-read what I said:

    The GMT-900s are not selling all that great either. Some models are seeing increased sales, while some are seeing dropping sales. Overall mixed results, and certainly not what GM was claiming would happen.

    http://media.gm.com/servlet/GatewayServlet?target=http://image.emerald.gm.com/gmnews/viewpressreldetail.do?domain=2&docid=33014

    The GMT-900s are BOTH the full-size SUVs, and full size pickups, because they all sit on the same platform, which of course is the GMT-900.

    Look at the January sales link I posted, and look carefully. Why post carefully chosen quotes, when you can go directly to the sales results.

    Let me summarize it for you (sales results for GMT-900s): Escalade sales are up, by various percentages for each model. Suburban sales are down, 13.7%. Tahoe sales are down, 38.7%. Avalanche sales are up, 75.4%. Silverado sales are *down* 3.3%, based on the daily selling rate, even though overall Silverado sales are up slightly for the month. The reason for this difference is that this January had one more sales day compared to January 2006. Roughly speaking then, Silverado sales are flat. Yukon sales are down, 7.8%. Sierra sales are up, 7%.

    So the facts speak for themselves. Overall, GMT-900 sales show mixed results, and the GMT-900 SUVs certainly are NOT doing as well as GM claimed they would be. It is indeed too early to tell how the trucks are doing, but it’s been a long while now since the GMT-900 SUVs have been on the market.

    The GMT-900s do not look like a success story so far. The SUV sales can only get worse from here. Truck sales remain to be seen.

  • avatar
    willjames2000

    Nino

    Nothing. And that’s my point. GM can’t make him take anything he doesn’t commit to. He got the Vettes because he sells them. He has more now because production capacity is steady, while sales rise and fall. Corvette is a high-demand (although not neccesarily in NY this time of year), low availablility vehicle. He has to take them when he can get them, and now he can get them. Then when Spring rolls around, he’ll sell way more than GM could make for him for a few months.

    But that has nothing to do with having to take other product. A GM dealer does not have to take anything other than what he commits to on a monthly basis. If GM says they can build him 25 Vettes in February, he agrees to take them, or less, or asks for more. If he agrees to take what they promised or less, that’s what he’ll get. If he asks for more, he may get more. It’s the same thing with every other model. One model’s availability does not depend on the other.

  • avatar
    skor

    willjames2000:

    And you’d know this how?

    The fact is I have it from a VERY reliable source that GM’s product allocation is controlled, but mostly “turn and earn” for high demand, low availability product like Corvette. You have to sell one to get one, and the faster you sell it, the faster you;ll earn one, then two, then more. At GM there are no “gotta takes” in order to get anything.

    I don’t know the exact Crap-mobile to Corvette ratio, but if a dealer isn’t getting any butts in the Crap-mobile seats, he sure as hell isn’t getting any Corvettes (or other popular models) from GM either.

  • avatar
    willjames2000

    Skor

    Read my post just before yours. This is how it works. Believe me.

    But if you don’t, check out one of the biggest Corvette dealers in NYS (although no-where near as big as Ramp). A little Chevy dealer called “Gary Enck’s Car Store” in Cooperstown NY. Usually has 25 or more Vettes in stock, but not much more. Where did all the other stuff go that he had to take to get the Vettes? No where because that’s not how it works.

  • avatar
    skor

    willjames2000:

    Skor

    Read my post just before yours. This is how it works. Believe me.

    If what you say is true, the only things most Chevy dealers would stock would be Corvettes and SUVs with 57″ spinners.

  • avatar
    Glenn

    Hi willjames2000. The 1997 Chevy Cavalier I last owned / was my LAST GM ever (traded off in 1999), was treated well and serviced properly, just like every other car I’ve owned and tried to look after, since I was 16 years young. I’m now 49. 33 years of car ownership. It surely wasn’t “just” the $80 on the Cavalier, brother, it was the prior 25 years of total frustration with anything to do with GM dealers over that time. In fact, that car was my first, and last, Chevrolet because I had heard nothing good EVER about the experiences people had at Chevy dealers. I bought it as a “commuter” car because I had a Ford product (in fact, a 1990 Lincoln Town Car) that I was so disgusted with that I swore off their trash forevermore, as well. And the Cavalier was offered with 48 months at 3.9% interest which was good in 1997. Ironically, the 1999 Dodge Neon I traded off the Cavalier for was even worse, subsequently, than the Chevy (now, what excuse is there for the head gasket to go twice in 60,000 miles on cars, when cars have been manufactured for over 100 years? Chrysler can’t figure head gaskets out by now?)

    In fact, my father’s commentary to me in my teens was “GM could take a Donkey, tatoo a Chevrolet bow tie on it and sell it.”

    So to be totally honest, it was far more than “just $80”. It was total and complete disgust with the US brand dealerships, which is pretty much all the experience I’d had up until that time, since I’d essentially ‘stuck with the home teams’ unless I lived overseas, such as in the Air Force.

    Maybe instead of taking the mickey out of me for making a statement about giving up on GM over an $80 bill DURING THE BUMPER TO BUMPER WARRANTEE PERIOD, you’d be advised to tell your buddies at GM to make their damned warrantee worth more than toilet paper.

    I might also add that I had some bogus BS from the guy at the dealer (who’d insisted on “turning” the damned rotors for the 3rd time) that “oh, rotors aren’t covered after X number of miles, it’s in the fine print of the warrantee.” I responded with “well, I have a paper in the glovebox that shows this very dealer “turned” the same rotors for the 2nd time at X minus 2000 miles. Speaking of which, I know about cars, and I know you should not turn these obviously faulty rotors more than twice, yet you’re not only insisting on turning them a 3rd time instead of replacing them, but now you’re demanding $80? Tell you what, write it off, or write me off as a customer for the next, oh, 35 years. ‘K?” He insisted on the $80.

    So, I wrote check, went immediately to non-GM parts store, bought the damned rotors, and a buddy and I put them on. (I didn’t even want to be remotely responsible for the death of the subsequent owner, thanks). They didn’t cost even close to 1/2 of $80, I might add.

    Then I went and traded the POS off and as promised, I have not bought another GM product since, and won’t.

    Actually, I’ve run out of ‘domestic’ car manufaturers, and have now gone to Toyota.

    Or, have I? Lots of Hondas, Toyotas, Subarus, Hyundais and soon Kias, are made in the USA. A lot of GM, Ford and DCX stuff is made in Mexico.

  • avatar
    Glenn

    Some of the Korean brands in the UK are doing “all services for X number of miles / years included in the price” as part of the benefits of owning their product. Surely the smarter buyers also know there’s no free lunch and the cost is added in the price of the car, for goodness sakes.

    I honestly think it would work here in the USA.

    They also scared the crap out of the competition who’s executives were so incredulous that they actually telephoned Hyundai UK’s HQ, when Hyundai actually added a long US type warrantee on instead of the usual UK piss-poor warrantee the other manufacturers deem “good enough.”

    Not stupid, the Koreans. Instead of the customers taking their cars to “slightly cheaper” service stations, they come back to the company dealer (even if it isn’t the one they bought from – perhaps they moved) and in doing so, get a chance to see the new product. And have face-time with sales people (who aren’t pushy, I might add). Kind of like the “Saturn experience squared.”

    I don’t want to see GM go bust, but if they don’t do something really really big and make some huge changes, they are going to become a primarily Chinese market 1/2 owned 1/2 assed company with a few global subsidiaries.

    But no, I’ll never buy GM myself ever ever ever ever. I’d drive a Russian Lada before I’d get another GM product (not that you can buy Ladas in the USA but I’m sure you get my point).

  • avatar
    ttac_guy

    This won’t be an easy pill to swallow and costly but… Offer free maintenance for four or five years. Yeah, yeah I know Mercedes dropped it, as did Audi, Leaving BMW as the only brand including that service. Now before someone of you preforms the knee jerk response of “Yeah but those are premium brands!”. Mini also includes free maintenance 4years 50,000mile. I have a Mini. Nothing compares when the dealer stands right by you not just for what the law of the land requires but also for little things such as oil changes, wiper blades.
    Our manufacturers need to stop building cars they will not stand. When a Mini buyer purchases his/her ride it costs nothing $0 for those four years. Maybe wiper fluid but that’s all! And this from a $16,500 car, that performs like no other. Like I said I have one of these and it has some cheap plastic inside and some sqeaks (I like Mini, but I’m not going to lie for them).
    I’m not stating that free maintenance should be the norm, that would be unrealistic. But these guys are fighting for their lives here. 10 year/100,000 mile warranty!!! Are you F’ing kidding me? GM & co. need to prove right here right now, that if I save thier collective butts by returning to the fold and purchasing a car I wont regret it. We all know corporate memory is short. 9 years from now when I have a tranny problem they may say oppss the policy doesn’t cover abuse or some other crap. My car tells me when it’s time for that service visit and I know not a penny is expected from the cashier .
    Think of when you were just starting out. The cost of maintenance vs. dinner with your girl meant the car would wait, don’t fool yourself, fewer kids today are willing to work on cars than when we where younger. Newly weds don’t have much cash housing is going through the roof. The economy will not turn around until we build quality products, and we do in many cases, and have the honor to stand by those products.

  • avatar
    nino

    “Ramp Chevrolet in Nesconsett, NY, presently has over 75 Corvettes in stock and another 8 were being delivered today..”

    Absolutely wrong. Bad information my friend.

    OK, how many do they have?

    I saw 8 being dropped off today.

  • avatar

    WillJames2000:

    Read your email.

  • avatar
    jp3209

    RF:

    Excellent piece. I am a GM fan, read GMinsidenews. I think that some of the new product will change things, but even I don’t realistically think that GM will be back to it’s former glory – ever. The world has changed, simply put.

    The question I pose to other readers/posters, is how exaclty does the dealership network function? If GM can’t get rid of dealers that are underperforming, is it possible they’re trying to allow certain dealers to fold? Is that a viable business strategy? Does Toyota’s dealer network operate under similar restrictions? I assume that franchise law is the same for everyone, but contracts could be different.

    Anyway you cut it, GM’s back is to the wall. For me, more important than their month to month results, the question is do they even admit that they’re in the fight of their lives? I think the answer is yes. Do they know they’ve lost an entire chunk of the car buying popular? I think some execs do, others, sadly, have yet to admit this.

  • avatar
    KixStart

    WillJames2000, Johnson, I read the sales report, too.

    Arguing about whether or not the GMT900 is a “success” is like discussing whether or not a surplus of deck chairs on the starboard side helped sink the Titanic faster.

    I’ve never seen so many negative numbers in my life. Gaa! And on just about everything, including the Corvette, the new roadsters, etc. I’ll bet the increase in Cadillac SUV sales can be attributed to the fact that they’re so heavily discounted that they’re stealing sales from the lesser SUVs. If you’re crazy enough to disregard the last gas price shock, why not go all the way? Especially if it’s not much more than you’d planned to spend, anyway?

    After reading GMInsideLineNews – of all things – I think what GM needs is a new “halo” car of sorts. Not tne usual kind, though, with V8 power, etc. They need a Corolla-killer. Toyota’s apparently got a new ad campaign, “40 is the new 30.” That’s gonna hurt.

    And the truth of the matter is, Toyota has the lead in the fuel economy race. I have no doubt that GM’s fan club could point to any number of comparisons where GM is “equal” to Toyota and I consider most of those bogus but they don’t matter.

    What matters is that Toyota has several cars that can put a ’40’ sticker on the window and GM has none. If nothing else, this wins Toyota tremendous “mindshare.”

    Frankly, I don’t see GM has the technology to put up a ’40’ with a gasoline engine, so they might as well be bold and introduce a diesel ’40.’ If they could get a ’40’ with a bigger car than the Corolla, it just might help.

    Can they get a decent (and, please, God, RELIABLE) diesel engine into a Malibu and squeeze 40mpg out of it? Even with a stick? By fall?

    Of course, if GM believes, as I do, that an Accord may soon (fall ’08) show up with a diesel that gets well over 40mpg or a gas drivetrain that gets into the high 30’s, maybe they think a 40mpg Malibu would be a “why bother?” proposition.

  • avatar
    KixStart

    … proportion of stick CamCords? …

    Good question. A buddy recently switched to an automatic I4 Accord (from a Buick). I asked him if he’d thought about going with a stick.

    “No. With an automatic, these cars are as good as cash.”

    I’m not immune to that logic, myself. I saved money on my most recent Toyota by purchasing one with a stick (I prefer it, anyway). A stick Malibu might be a difficult thing to move.

    And, I hadn’t considered this, is it more difficult to drive a diesel stick than a gas stick? Trickier takeoff? More unpleasant coast-down?

    In any event, the gap between auto and stcik has narrowed a lot over the last few years and some vehicles have better EPA ratings with an auto vs their stick versions.

  • avatar
    Martin Woodman

    KixStart

    In my opinion, it is easier as the first gear is a bit more ‘permissive’ because of the higher torque, it is more difficult to stall a diesel car and helps too in slopes and when parking. The only thing you have to be careful about is rpm as diesel engines spin slower, but I suppose you get used to it after a while.

  • avatar
    Glenn A.

    GM “could” use an Isuzu produced 3.0 liter turbo diesel V6 or a co-produced with FIAT 1.9 liter diesel turbo diesel four in their new Malibu / Aurus but….

    a) After their last diesel engine fiasco, how many GM tolerant buyers will give them a 2nd chance.

    b) The euro-cost of the engines (exchange rate) would pack on even more cost than the additional cost of the diesel engine itself, compared to an el-cheapo gasoline OHV V6 or Eco-Wreck four banger.

    c) They won’t pass the new emission standards so it’s a moot point.

    Drove a GM Vauxhall Zafira (with the prior gen 2.0 diesel) and 5 speed when on ‘holiday’ in the UK about 20 months ago and it was gawd-awful.

    Gutless? Check.

    Bus-like driving position? Check.

    Agonizing clutch? Check. (My left leg hurt for the first week).

    Smelly fuelling and standing in spilled diesel fuel at ‘petrol’ stations? Check.

    Fuel costs more than petrol, just like in the USA? Check.

    To think I asked for a diesel (because of the 20-30% better mileage and only 10% additional cost of the fuel compared to gasoline).

    Give me credit, though. I tried for six months, to get someone to rent me a Prius in the UK. Nope. Toyota UK didn’t even return my emails. (They rent cars in the UK).

    Apparently there are no Prius cars for rent in the UK because nobody there buys them, they’d rather drive diesels (see above for some of the disadvantages, please).

    I saw maybe 4 Prius cars in the UK in nearly 3 weeks, I see that many in my home town of 20,000 in about 2 days.

    Yeah, I do think the Brits are as dumb as a plank for being pro-diesel.

    Coincidentally, the only 1/2 hour of TV I watched in ‘holiday’ was a BBC TV new show – on which they commented on how bad diesel fumes were for the health…….

    A few months ago, there was bit of news from Scotland, where scientists had determined that “high speed diesels” (i.e. small diesels for CARS) emitted very tiny particles of soot which they’d proved to be the culprit in a huge increase in heart attacks in Scotland since diesels had become popular.

    I never would have imagined that the size of the pollutant would factor into whether it harms us, but apparently that’s the case….

    For anyone who cares, the Prius is approximately 20 times cleaner for emissions compared to a 2006 VW Jetta. Prius also emits less pullution AND CO2 than a SMART car diesel.

  • avatar
    jerseydevil

    probably a good time to get a great deal on a car! who will it be? Ford? GM? Chrysler? hmmmmm….. I should probably start keeping track of the best deals…

  • avatar
    Glenn

    So when does the ‘studebaker syndrome’ start to show up in the US auto marketplace for GM, Ford and DCX?

    You know, the train of thought that goes like this. ‘Uh, wow, with all the bad press, ya hafta wonder – is this company going to be in business next week and am I considering the expensive purchase of an orphan?’ And of course, the more people who think those thoughts, the faster it becomes fact and the company(ies) fold up and die.

    Interestingly, it was largely GM, Ford and Chrysler dealers who were muttering to their prospects about Studebaker which ‘helped them into the grave’ (along with Packard, Kaiser, Frazer, Hudson, Tucker, etc. etc.)

    This time, I don’t believe any reputable dealers will be verbally commenting adversely about their competition. The Japanese are so sure of themselves, they don’t have to.

    Even so, the ‘studebaker syndrome’ may well come to GM, Ford and DCX.

    All I can say is “kizmet” and “ain’t paybacks a bitch?”

  • avatar
    Glenn

    jerseydevil, the Chevy dealer near me is advertising brand new Chevrolet Silverado pickups for $12,990.

    I don’t think the Chinese could build that much metal and sell it at a profit, at that price. Little wonder GM is going broke and losing money on every new vehicle.

    Ford was trying to flog Escorts locally new for $9999. This even got my wife’s attention.

    All I had to say was “um, it’s a Ford, dear.” After our last ‘dorf’ product, she doesn’t want anything to do with them again.

  • avatar
    IAMVince

    The Studebaker syndrome? I would say that only those individuals with a zealous hatred (somebody p’d on their corn flakes) of one of the Big 3 would attempt to propogate such a thought.

  • avatar
    nino

    About Diesels:

    I’ve driven a FIAT Ritmo Diesel, a BMW 3 series with a Diesel, and a Renault Megane with a Diesel, and have to say that I was very impressed by all three of them.

    The Ritmo could cruise all day at 100 MPH and return 55MPG very easily.

    The BMW was a newer model (pre Bangle though) and had all the goodness and performance that one expects out of a BMW….along with combined fuel economy of 37 MPG.

    The Megane, while pretty funky looking, offers very good performance while giving you real world economy of almost 50 MPG combined! If you give up a little performance, you can opt for a smaller Diesel that returns almost 60MPG in combined driving.

    I found that no sacrifices or compromises were needed with these vehicles and really feel that especially the BMW would be a great success here. The Megane is built on the same platform as the new Nissan Sentra, so don’t be surprised if Nissan brings in a 50MPG Diesel Sentra sometime soon.

    A Toyota Hybrid that used a Diesel instead of a gasoline engine, would return real world fuel mileage in excess of 65 MPG. The Volkswagen Jetta TDI already sold in this country, returns about 55 MPG on the highway without resorting to hybrid tricks like narrow, hard tires, engine shutdown, etc.

    GM should do all it can to bring in Diesel engines for both the Aura and the new Malibu.

  • avatar
    nino

    Ramp Chevrolet has 52 Corvettes in stock, although I didn’t find the 8 Corvettes that were dropped off yesterday. They could be at the prep area where they take off the wheel covers and plastic “stick on” stuff that protects the fenders.

    I counted every single one of them myself.

    This still didn’t have any difference on the argument at the time as 52 is still a significant number of Corvettes.

  • avatar
    nino

    I think where GM (and some other companies) could carve out a little niche is to bring back HATCHBACKS.

    GM dropped their Malibu Maxx that while not the best looker, definetely had a lot of versatility going for it and included such unusual features as a glass roof over the rear seats and multi-adjustable rear seats. Why is it that I feel that a better looking, decent performing new Malibu Maxx has the potential to be a hit?

    And why is it that everybody seems to be dropping their hatchbacks? I think that hatchbacks are one of the top five best ideas in cars.

  • avatar
    nino

    Ford was trying to flog Escorts locally new for $9999. This even got my wife’s attention.

    You mean Focus, no?

    Escorts have been out of production for a while.

    But a Focus ZX3 hatchback at under 10K new is actually a pretty good deal…a better deal than a Honda Fit, in my opinion.

  • avatar
    allen5h

    CliffG wrote: “I also note that RF put in parentheses a core problem of GM, the fact that the greatest competition to a GM dealer is another GM dealer down the block.”

    and nino wrote: “Frankly, there are a few family owned dealers here by me where the real estate the dealerships sit on is worth more than the franchise.”

    In my former home town in KY a Pontiac and Chevy dealer are competing directly across the street from each other. I do not know what the land is worth vis-à-vis the dealerships, but I do know that the owner of a local rental car agency (they rent mostly GMs) told me that these GM service depts. can not fix anything, but you still have to pay for parts and labor that fixes nothing. What can businesses like these be worth?

    *********************************************
    Glenn A. wrote: “Now, in California, I understand that non-US brands make up over 50% of retail sales.”

    and skor wrote: “Foreign branded cars must have a much higher market share in California than 50%. The foreign branded cars have taken about 70% of the market in New Jersey.”

    Looks like the D2.5 are getting squeezed at both ends of the stick.

    *********************************************
    Glenn A. wrote: “Cut down to Chevrolet and Cadillac, only, in NA. Even if the company has to go through Chapter 11 to do it.”

    and airglow wrote: “GM bought out Olds dealers and it was so expensive they will NEVER do anything like that again.”

    Chapter 11 will be the only way they can do this.

    *********************************************
    Glen A. also wrote: “To make it more equitable for all GM dealers, and to improve the remaining dealerships, pull ALL GM franchises and only re-assign Chevrolet and Cadillac dealerships to the BEST dealers in any given region.”

    Not going to happen this way. Dealerships will be reassigned according to who has the best lawyers, not who is the best dealership. (Who is the best dealership is very objective, who has the best lawyers is not at all objective.)

    and also: “Tell the UAW and CAW – we have got this many jobs here, here and here. We want flexiblility to run our own plants and place people where they’re needed. Either sign on with this,
    -or- we simply move our machinery to China… No bluffing.”

    The UAW will call GM’s bluff, and GM will be forced to move their production to China.

    and also: “Put a REAL bumper-to-bumper 10 year 100,000 mile warrantee…”

    In the early 80’s my boss purchased a new Chrysler New Yorker with Iacocca’s “5/50 (I think it was 5/50) B-B warranty”. One day his car was towed back to the dealer, and my boss had to pay for “an electrical part” because they are “not covered” by the “5/50 BBW”.

    I believe that eventually (out of desperation) the D2.5 will sell new cars with a 6/60 or 8/80 or 10/100 (pick numbers, any numbers) “BBW,” but nobody will honor their warranty beyond 3/36.

    Won’t this by God be an incentive to make the cars right the first time? YES.”

    No, it will not be an incentive to do anything any better because nobody will honor it beyond 3/36. It will only expedite their demise as word gets around that nobody honors it beyond 3/36.

    If GM can’t build a car to withstand that, then GM should close up shop, roll over and die.

    Nobody can build cars that can withstand an honest 10/100 BBW, not even Toyota/Lexus or Honda/Acura. (None of the profitable outfits are even offering 10/100 free maintenance.) Look for the D2.5 to come out with this 10/100 BBW sales gimmick out of desperation, it will mean the end is near.

    and also: “… and just make good cars, or nothing at all in any given segment.”

    They will build nothing at all in all given segments.

    *********************************************
    jp3209 wrote: “Excellent piece. I am a GM fan, read GMinsidenews. I think that some of the new product will change things, but even I don’t realistically think that GM will be back to it’s former glory – ever. The world has changed, simply put…

    …Anyway you cut it, GM’s back is to the wall. For me, more important than their month to month results, the question is do they even admit that they’re in the fight of their lives? I think the answer is yes. Do they know they’ve lost an entire chunk of the car buying popular? I think some execs do, others, sadly, have yet to admit this.”

    jp3209, I have alot of compasion for you because the auto manufacturer that you either trust or want to trust is in very deep trouble. I know how you feel about the tens of thousands of UAW jobs that are at risk, and your concern for these jobs is commendable.

    Sadly, the firm that you are a fan of is losing their customers, one by one. I know of a very senior fellow in KY who served in the Pacific theater during WWII. A few years back he ditched his Buick for Acura’s (very expensive) flagship made in Japan. He was totally demoralized because he did not win in arbitration per the KY lemon law. What might this man be telling his grandchildren, and great grandchildren, about GM?

    I had a new GM lemon. I understand how these GM dealerships have learned to “game” the lemon law system. What they do is instead of opening up a new work order for the same problem, they simply do an addendum to the previously existing work order. So if they attempted repairs on the same problem 3 times in 30 days then it was only “one attempt to repair” this problem. They also use different nomenclature on the work orders for the same problem. Totally dishonest way of doing business. What makes me think any GM dealer will honor any 10/100 BBW that Glenn A. is talking about? (The 10/100 BBW may be coming to a GM dealership near you.)

    Earlier in this post I wrote that the owner of a local rental car agency told me that these GM dealerships can not fix anything, but expect to be paid for parts and labor that fix nothing. (And I know for a fact from my own personal experience that one of these GM dealers, the Pontiac dealer, can not fix anything.)

    I also ditched my Pontiac lemon for a Honda. One by one, the D2.5 are losing us.

    What could GM do to win me back?

    Not a 10/100 BBW and a GM certificate for 50% off the new car price. In fact, if GM was to ever contact me to offer me a free new vehicle I would very graciously decline, since I would not even want to be bothered trying to sell it. (Selling new cars is not how I make my living, I am not a new car salesman.)

    Hhmmm, well there is one thing that GM can do for me. If Mr. Lutz where to call me personally to inform he will agree to give up flying around in jet fighters for a few years if I agree to give up driving around in Hondas for a few years (for a new free GM in its stead), then I will abide by this agreement. (Hey, I almost gave up my life on several occasions in his death trap, he should be able to give up something.)

  • avatar
    nino

    For those looking for a positive experience with a domestic make;

    2002 Mercury Cougar with 48,000 miles goes to the dealer for repair of an oil leak, a warning light that goes on for no reason, and a broken passenger door hinge. I sat down with the service manager to explain to him that the car was in a year ago for the warning light and the door hinge, I was charged for the fix on the warning light and was told the hinge was on order however, the warning light came on again after 1,000 miles of driving. I was never called back to fix the hinge. I expressed my opinion that I didn’t think they did anything with the car and that I felt I was charged for a repair they never did.

    This time, they took the car in, fixed the crank seal that was leaking. I was told that the serpentine belt was a little nicked and that it should be replaced. Also, the warning light was traced to a bad radiator overflow bottle that was replaced and lo and behold, the hinge that was ordered a year prior was collecting dust on a shelf with my name on it.

    All repairs were done timely and expertly.

    I was charged $40 for the serpentine belt, $55 for antifreeze to fill the cooling system and new bottle, $25 for the new door hinge, and $32 for an oil and filter change due to the faulty seal.

    $152 total THAT’S IT!

    The dealership expressed regret that they were negligent the first time around and that this time they just charged me for parts as the labor was on them.

    Now, I’ve had my share of charges for mechanic work done and needless to say, I WAS SHOCKED.

    I’ve been one of the most vocal critic of the way domestic dealers treat customers, but if this is an indication of the way domestic dealers treat their customers from now on, then I can see a dim light at the end of the tunnel.

  • avatar
    jp3209

    Alleh5h –

    In the interest of full disclosure, I should mention that I grew up with a dad working for GM 38 years before he retired. So in that sense I am concerned about his retirement, etc.

    I most certainly DO remember my mother’s pontiac transmission going out at 20,000 miles sometime in the 80’s. I can’t remember exactly, it was a while ago.

    I recently purchased a 2007 Colorado. The only other truck I looked at was a Toyota Tacoma. And for those wondering, yes, the salesman at the Toyota place mentioned that GM was having financial troubles, and that with the deep discounts that GM offered, I would lose the residual value. Of course, he kind of rubbed me the wrong way when I looked at a crew cab 4×4 Taco and said “What do these go for, $30K?” And he says, “No, well under $30,” The sticker on the window was at roughly $29,300… ok, roger that, well under 30. Anyway, since I get the GM family price, I went with the Colorado. Would I have gone with it without that price break? I don’t know. I don’t know if I would have gotten a new vehicle, but I liked the idea of 5/100 warrenty. I had an extended warrenty from my dealership with my Silverado, and the one thing that did go wrong was covered.

    Which brings me back to part of my orginal question – to people that work in dealerships… is there a difference in how Toyota, as a parent company, operates it’s dealerships? Or do the D 2.5 just have an older network of dealers who came to power (for lack of a better term) during the ‘good ole’ days’ and think that’s simply the way business is done? Wasn’t that the ENTIRE reason for creating Saturn? To create a new dealer culture?

    And if the D2.5, as companies, are unhappy with the way that their dealers are treating customers, what recourse do they have against them? I mean, I’m pretty sure that if you treated customers at your Starbucks or McDonalds like crap, and the parent corp heard about it, they’re drop you like a bad habit.

  • avatar

    Groovdog:
    The real issue is too many dealers as each as has to have vehicles and the competition between GM dealers is killing those dealers while degrading the product (it becomes a bidding war, dealer against dealer rather than about a product).

    From this morning’s Detroit Free Press:

    LAS VEGAS — Detroit’s automakers have too many dealerships, and one prominent auto analyst said Friday they need to cut the number of stores by two-thirds to make their retail networks competitive with those of foreign automakers.

    General Motors Corp., Ford Motor Co. and the Chrysler Group need to reduce the number of dealerships nationwide by 60% to 70%, Stephen Girsky, president of Centerbridge Industrial Partners LLC, said Friday morning.

    In 2006, GM had 13,974 dealerships. Ford had 7,106 and Chrysler 8,541.

    The complete article is here.

  • avatar
    windswords

    ‘In the early 80’s my boss purchased a new Chrysler New Yorker with Iacocca’s “5/50 (I think it was 5/50) B-B warranty”. One day his car was towed back to the dealer, and my boss had to pay for “an electrical part” because they are “not covered” by the “5/50 BBW”.’

    Chysler has never had a 5/50 BBW. In the 80’s they did have 5/50 limited powertrain warranty (the best offered by ANY manufacture at the time) and they later increased it to 7/70. There was a $100 deductible. Later in the 90’s they intoduced a 3/36 BBW warranty. I believe now you can get both warranties but I may be wrong.

  • avatar
    allen5h

    jp3209 wrote: “In the interest of full disclosure, I should mention that I grew up with a dad working for GM 38 years before he retired. So in that sense I am concerned about his retirement, etc.”

    We are living in a brave new world whereby it is now incumbent upon workers to “fund their own retirement.” Retirees who are dependent on a retirement pension are in a race with their pension to see who dies first, the retiree or the pension. This is true of all industries – the retired airline pilots are now learning this bitter lesson – but especially true of the now defunct heavy industries (such as steel, shipbuilding, soon to be autos).

    “I most certainly DO remember my mother’s pontiac transmission going out at 20,000 miles sometime in the 80’s.”

    During the 80’s and 90’s tens of thousands of customers of the D1.5 got stuck with expensive repair bills due to premature failures of ATs. (Not all of them, just tens of thousands.) In all fairness to GM this was mostly the case for Ford and Chrysler customers, as GM ATs have generally had a great reputation for durability.

    “Anyway, since I get the GM family price, I went with the Colorado. Would I have gone with it without that price break? I don’t know.”

    Purely anecdotal, but I have a friend in Indianapolis whose father retired from Ford. He also purchases new Fords because of the lower family price. Unfortunately for him, his Ford Taurus A/C compressor failed, spitting small bits and pieces of material throughout the entire A/C system, estimated for about $1,500 by the Ford dealer to fix. (But how much would it actually cost for the Ford dealer to fix it?) So he took his familly on vacation to visit his dad in Arkansas one hot summer without any A/C. I do not believe he ever got that fixed; he was so afraid of a repeated breakdown, the actual repair price, and the quality of the repair workmanship on a repair job with such extensive damage to the A/C system.

    “I had an extended warrenty from my dealership with my Silverado, and the one thing that did go wrong was covered.”

    I would never buy an extended warranty from any dealership, foreign or domestic. Contrary to what the dealer may say, you are actually signing a contract with an insurance company that may or may not be in business the next month. These things have a sour history with consumers, as they are nothing more than revenue enhancement for dealerships who “churn” these insurance entities, constatnly creating and then bankrupting them so no consumers ever gain any insurance benefit.

    “Which brings me back to part of my orginal question – to people that work in dealerships… is there a difference in how Toyota, as a parent company, operates it’s dealerships? Or do the D 2.5 just have an older network of dealers who came to power (for lack of a better term) during the ‘good ole’ days’ and think that’s simply the way business is done? Wasn’t that the ENTIRE reason for creating Saturn? To create a new dealer culture?”

    No, I do not believe that Toyota, as a parent company, operates its dealerships any differently, because these are independently owned franchises, and they are run as the owner sees fit. There are bad Toyota and Honda dealerships, and these owners know that the next nearest ToHo dealership is so many miles away, so they have more latittude as far as what shenanigans they want to operate with.

    This is especially true of the same owner who owns both Toyota and Honda franchises. If I was the CEO of either Toyota or Honda of America I would forbid any one owner from owning both franchises for this reason: So many people have (rightly or wrongly) reached the conclusion that the best value for their new car money is either a new Toyota or Honda, and these “double owners” know they have the local market cornered with these people, sometimes up to a 50 mile (or more) radius.

    An example of this is this ToHo dual dealership in KY, both owned by the same owner. When I went to buy my first new car in 1997 they had me sit down for ever without any sales assistance while their salespeople where walking around in circles in their showroom with nothing to do. I purchased a new Pontiac partly because of this treatment, and partly because of the lower cost to purchase and finance.

    FWIW, here is what this dual ToHo owner has been up to recently:

    http://tinyurl.com/27jkez

    and also:

    http://tinyurl.com/2f7996

    “And if the D2.5, as companies, are unhappy with the way that their dealers are treating customers, what recourse do they have against them?”

    The companies, both foreign or domestic, either can but will not, or simply can not, do anything. I have heard of only one franchise in N/A (foreign, in CA) being dissolved by the manufacturer because of bad business practices.

    Actually, sometimes it is the car companies themselves that encourage this sort of thing. You may remember that leasing fraud used to be the MO of FoMoCo Financing until enough State Attorney Generals put an end to it.

  • avatar
    IAMVince

    “I would never buy an extended warranty from any dealership, foreign or domestic. Contrary to what the dealer may say, you are actually signing a contract with an insurance company that may or may not be in business the next month.”

    Not always true. Make sure it is a manufacturers warranty (GM Protection Plan for instance) before purchasing. These are backed by the manufacturer and are legit.

  • avatar
    moto

    Some believe that the US auto industry will die; some believe that the big 2.5 will muscle through and retain a top position in global sales. Both views, IMHO, are wrong. No one can predict the future, but North American auto industry is simply not agile enough to stay on top. I attribute this to: 60% corporate greed & short-term thinking on the part of leadership and Wall St.; 40% to union greed and laziness. Until long-term thinking, egalitarian salary & incentives, and strong work ethic come back to America, no US industry is going to be #1 for very long.

    Tomorrow’s “big 2.5” with look a lot like today’s Fiat group. That doesn’t mean that Fiats are bad (they make some good and some not-so-good products), but their legacy costs and poor work ethic will keep them from ever again becoming a world-class auto producer. Look to companies like Honda, which is obsessed with reliability, versatility, and new clean technologies — but doesn’t obsess about being biggest or setting stock price records — as one of the automakers to be most successful over the long haul. By successful, i mean good for customers, workers, managers, investors, and communities where Honda operates. Everybody wins.

    In the good old USA, winning is now defined only by what Wall St. thinks of this quarter’s earnings. We sit atop a fragile house of cards when executives proclaim we all win but everyone else (car owners, workers, communities, dealers, …) all feel they lose. Executives commonly bring home a greater salary in ONE DAY than any professional technical worker with a master’s degree can earn in ONE YEAR. This alone is proof positive that corporate control is steering the economy to the edge of the cliff. What can the hardworking citizens of the USA (remember when we were called “citizens”, not “consumers”?) do to change course? Except for this blog, it seems everything we see, hear, feel, and taste has been imported and copyrighted for the licensed profit of some corporation that is headquartered in the Bahamas to avoid taxation. No surpise why so many nations around the world reject American-style capitalism — it hasn’t kept our industries healthy, and it just isn’t sustainable.

    Irresponsiblity at corporate headquarters in the offices of their puppets in Washington DC is killing not only the US auto industry, but the very competitiveness of the USA as a whole. The shame of it is, while we’re fretting about stock price and car sales, other countries look at health of the population (Cuba is far healthier than the USA), literacy (USA does not rank in the top 20), life expectancy, etc. Simply put, the woes of the big 2.5 are direct reflections of continued corporate AND union malfeasance. The US government, being all but owned by corporate underwriters, have shown shortsighted management of our resources, wealth, and responsiblities as global citizens. New superpowers China and India, with all their problems, certainly won’t take our lead of how to sustain a country. If they are smart, they will enrich the lives of all citizens, not set new automotive sales records.

  • avatar
    Media

    With now getting up to 108 episodes on this GM death watch. And with ALL EVIDENCE looking showing the worst is behind them it gets to the point of when you guys are just going to swallow you ignorant pride and admit you were wrong.

    Atleast yo have way more evidence with Ford and DCX to prove you may have a point with them but as far as GM goes it seems they are on the right track.

  • avatar
    Captain Tungsten

    RF Wrote: “Keep in mind that the 80-day inventory figure includes sales to rental fleets, which must go through a dealer, which only takes a few days. The “actual” inventory figure would be closer to 100 days. ”

    You can remove the quotes. GM inventory in January: 107 days. Let’s see what they do now.

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