By on February 6, 2009

OK, so the latest GM Fastlane PR exercise is actually entitled “What Is GM Doing With The Money?” Defensive much? Anyway, coming from Fastlane, there’s obviously no mention of giving Cadillacs away. Or throwing cash down the Delphi hole. Or paying Brazilian workers to sit on their hands. No, having received $13.4b, GM’s Steve Harris reveals that GM’s plan is to (wait for it) comply with the terms of the loan! In other words, “prove that we can repay the loan, achieve a positive net present value, and meet federal fuel efficiency and emission requirements, and manufacture advanced technology vehicles in the U.S. ” And with the federal money, GM is “making progress,” says Harris. How? By building concepts like the Cadillac Converj. And announcing vehicles like the 2010 Equinox (Saturn Vue cannibalism!) and the 2012 Spark and Orlando (which debut after the loan is due). Hallelujah!  And though Harris mentions the UAW Job Bank shutdown and “discussion” of plans to reduce dealers by 400 per year, his effort to “do a better job of communicating our successes (and) how we will be changing going forward” leaves out all the interesting bits.

Dow Jones (via CNN Money) says that GM will announce more plant closures shortly as it finalizes its February 17 congressionally mandated viability plan. According to Dow’s anonymous sources, “GM’s plant-closing strategy is complicated by the fluid state of the auto maker’s product portfolio.” As in, no clear brand or product strategy seems to be offering a direction out of the current miasma. Instead, each product will be judged on its own merit, and decisions will be made from there. “The outcome of product decisions will determine which factories go as part of the latest downsizing,” says the GM source.

IHS Global Insight last week predicted that GM will slash North American production by 1 million cars and truck this year, a 30% reduction. GI Analyst Haig Stoddard expects GM will have to close one of the company’s full-sized truck plants (probably the Pontiac, MI factory) as well as a car assembly plant in Orion, MI, or in Oshawa, Canada. Stoddard also expects Ford to close two plants, and says Chrysler could close many more.

Meanwhile, the “product first, brand later” strategy is especially starting to annoy Saturn’s long-suffering dealers. The Freep reports that Saturn dealers are complaining about being “in the dark” about plans for the brand, despite recent meetings with GM brass. “The only thing that was possibly certain was that if they decide to discontinue this brand for whatever reason then it will probably live through its product cycle,” says George Nahas, a Florida Saturn dealer, who also dismisses the notion of a Chinese or Indian buyout of the brand. “What does Saturn have to sell? They don’t build their own engines, don’t build their own transmissions, their own sheet metal. It’s shared with others,” says Nahas.

And though GM’s Mark LaNeve says a decision on Saturn’s future is “not something we want to rush,” the dealers aren’t sitting still. A Denville, NJ dealer is suing GM and Saturn in hopes of forcing them to allow him to sell Kias on part of his Saturn dealership. “All I’m trying to do is survive and survival means having products on my shelf that people are going to buy,” said Stuart Lasser. “This is a very difficult thing for me to even go out and file a suit, but I really thought that we were so wronged on this thing, I really had no choice.” Lasser accuses GM of betraying Saturn’s philosophy of offering affordable cars, and says his application to sell Kias was twice denied by GM.

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8 Comments on “So, What Is GM Up To With All That Cash?...”


  • avatar
    pixarwolf

    trying to read fastlane is like a bad drug trip – stay away!

  • avatar
    gslippy

    They’re probably wasting it on continued Volt development, which will never be profitable, and if it ever sees a showroom, will require constant government subsidies to stay alive. And I bet any theoretical consumers will not like the driveability and real-world issues with such a car.

    How about working on a car to compete with Fiat’s 500, which gets 50+ mpg and is coming soon to a Chrysler dealer near you, and doesn’t cost $40k?!

  • avatar

    I thought the whole thing about the bailout being used to pay people in Brazil was thoroughly debunked.

  • avatar
    Robert Schwartz

    “A Denville, NJ dealer is suing GM and Saturn in hopes of forcing them to allow him to sell Kias on part of his Saturn dealership.”

    The difference between ahving stones and looking for a pay-off. If he were serious, he would just do it. The worst thing that would happen to him is that GM would cancel his Saturn dealership. Oh, well, no ride on the Titanic for him.

  • avatar
    amadorgmowner

    I wonder how GM plans to shed 400 dealerships a year when they can’t afford to buy them out? Gee-I know-they’ll use their former captive finance arm GMAC, who will cut off dealers floorplan credit lines and the dealers will have no choice but to close and GM won’t have to pay anything!!
    That’s exactly what happened in my rural town, Jackson, CA, on December 19. THe only GM/Toyota/Chrysler dealer within a 40 mile radius with a new GMAC financed facility, had to close after GMAC pulled the credit lines. Only after a massive e-mail campaign to GM and GMAC, plus a rally where 1500 people attended to demand GMAC use its bailout cash to help dealers, did they reopen talks with the dealer owner about re-opening. That’s how GM plans to close dealers, folks. It’s bullcrap. Then they have the nerve to ask us to buy GM cars when they’ve closed down the only local dealer!!! These type of actions are happening in rural and surburban America.
    I currently own my 17th GM vehicle(in 23 years) and after what they did to my local dealer and received a bailout, I think its time to buy a Toyota!!!

  • avatar

    For some reason that picture just made me angry. Like some sort of weird insult. Or something.

  • avatar
    catelu

    What kind of publicity is that?
    I mean, I know an X5 or a Q7 are better barges, but I’ll still buy an Escalade because some sports guy got one for free?

    I think having to pay for something others get for free would rather frustrate one.

  • avatar
    FromBrazil

    Or paying Brazilian workers to sit on their hands.
    Bogus. They’re not using American money for that. For that they’re using good ole Brazilian money.

    I thought the whole thing about the bailout being used to pay people in Brazil was thoroughly debunked.
    Correct you are. As said above its Brazilian baiout bucks they’re using. And also using it to fire 1000 people from one of their plant in São Paulo BTW.
    And yet here, nobody (though the Union tried) has raised the nationalist bravado and called them on it. Go figure. Brazil in 2009 is more global in its money use than other countries!

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