Editorial: General Motors Death Watch 254: All That You Dream

Robert Farago
by Robert Farago

The Associated Press called it: GM is set to enter popular parlance as “Government Motors.” When the automaker files for Chapter 11, the nickname will stick, as the debate over GM’s future centers on whether or not the United States government should own a commercial enterprise. To which the only possible answer is no. It was no back when President Bush over-ruled Congress and authorized the first multi-billion dollar “loan.” It’s no now, as the feds prepare to stump-up another $20 billion dollars to keep GM in business. There are lots of reasons why “new” GM is a bad idea. But here’s the most important impediment: Government Motors doesn’t have the vehicles it needs to survive.

Let’s assume “good” GM lowers its cost base to transplant levels and single-out the models that could give the post-C11 automaker a fighting chance. We’ll combine objective information (last month’s sales data) and some subjective analysis (the enthusiast’s perspective).

Although we’ve long argued that Chevrolet and Cadillac are the only GM brands worth saving, that’s not how Government Motors will roll. So we need to identify potential money spinners lingering within Buick, Cadillac, Chevrolet and GMC.

Buick is a lost cause. The “take a look at me now” brand stands for nothing, save God’s waiting room on wheels. In April, the LaCrosse and Lucerne sedans combined generated 1481 sales. That’s more than the Enclave (5,194 vs. 3,731), but less than Toyota Tacoma sales (8,925 vs. 9,027). I’m no fan of the Enclave’s exterior, but we’ve got to keep something. The Enclave stays.

There’s no nice way to put this: Cadillac is another dead brand walking. Last month, the “standard of the world” also accounted or less sales than Ye Olde ToMoCo Taco. Sales of all eight Caddy models combined clocked-in at just 8,337 units. Caddy has some new models in the pipeline, but c’mon. CTS Sportswagon? SRX replacement? While waiting for a flagship, the CTS is the only Cadillac vehicle worth saving, in terms of product excellence and sales (3,876).

GM’s volume brand is looking decidedly lackluster. The Impala topped Chevy’s sales chart in April at 17,532 units. The Malibu and Cobalt are next up, at 14,665 and 10,627 sales respectively. So, despite the fact that the Impala is a low-profit fleet queen and the Cobalt’s a POS, we’ll keep the old girl, the new ‘Bu and the crap ‘Balt. We’ll also hang onto the Camaro. Corvette? If you must. Volt? Cruze? Equinox? More pie-in-the-sky from America’s master BS baker.

Chevy trucks are still where the money is. Incentives be damned; 26,437 Silverado pickup trucks moved off the lots in April. I’m also liking the Traverse (8,204). By [literally] the same token, GMC should keep the badge-engineered Sierra (8,273) and Acadia (4,764), and stay the course with the Tahoe/Suburban twins (12,586 combined).

And there you have it: one Buick, one Cadillac, five Chevy cars, two Chevy trucks and three GMC trucks. Your list may differ here and there, but I reckon these are the eleven vehicles upon which taxpayers will risk at least $40 billion dollars. Which would be OK, if that was the long and short of it. But it isn’t. In fact, it can’t be.

As the New York Times recently asserted (welcome!), we can blame GM’s sclerotic corporate culture for their abject failure to create a complete line of compelling/profitable vehicles. The idea that the United States government will reform GM’s way of being and reverse the curse is completely preposterous. It’s like asking a cocaine dealer to sponsor a crack addict.

Initially, the Chinese walls separating Government Motors’ management from its political masters will prevent excessive tinkering. But there’s no way GM can insulate itself from “undue” political influence. Not when the feds are both the automaker’s controlling stockholder AND its main lender. And certainly not when there are so many GM “stakeholders” ready, willing and able to play political hardball with GM’s new owners.

Why wouldn’t they? The bottom line is that there won’t be a bottom line. The Obama administration may genuinely want to create and then sell off a profitable GM but it’s under no obligation to do so. To wit: there’s no deadline for returning taxpayer’s money. Even if a reasonable turnaround strategy emerges—complete with performance-based reality checks—the new management team is destined to fall afoul of institutional apathy. I mean, we all know how many government-sponsored projects come in on time and/or under budget . . .

Think of it this way: the above list of cars GM needs to keep AND cull to survive presumes that Government Motors’ new overlords will ignore the blowback from closing factories in any given country, state or congressional district. That’s simply not realistic. If the survival of federally-funded weapons programs depend on their sponsors’ political pull as much the systems’ efficacy, why would we expect anything less (or more) from GM’s lineup?

To paraphrase Lowell George, GM’s been down—but not like this before.

Robert Farago
Robert Farago

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  • Jmatt Jmatt on May 31, 2009

    Here's a thought: Why won't government motors implement Obama's new CAFE standards immediately? Why wait for 2016? I mean, if changing fuel efficiency is as simple as passing a law, why not have Government Motors lead by example and start immediately producing a full line of vehicles that get 35.5 miles per gallon? Then Americans could shed all those spacious, safe SUVs and Mini-Vans they hate so much and drive match box cars made out of straw and bark that run on Hope and Rainbows and Unicorn poop.

  • Joeaverage Joeaverage on Jun 01, 2009
    I mean, if changing fuel efficiency is as simple as passing a law, why not have Government Motors lead by example and start immediately producing a full line of vehicles that get 35.5 miles per gallon? Well - - - the gov't could allow the automakers to bring in all their rest of the world products like the little diesels and city cars. Yes, we would have quite a selection of 35 mpg cars to choose from in no time and no they would not automatically be unsafe or gross polluters. These little cars could be products produced by the very same GM and Ford we already know so well. Ooops! Opel is sold. GM may no longer have any European products except rebadged Daewoos. I hope the new Opels come to America. I really like the Astra and the newest Vue. Just not in the market for a new car right now... The problem would be the delay between when the average American consumers first saw them and then first gave them a chance. Around here (small town TN) European cars are still a rarity. Still meet people who would never buy anything but a Detroit product no matter how bad it was or how good the competition is. This IS changing. Had an elderly relative who asked if my later 90s VW still had the engine in the back like his 60s Beetle. Alot of people just don't know that much about those products. Wonder how that would work. I imagine the car mags slaying any newcomers to the American market worrying about all sorts of minutae and ignoring a good product if it was one. Can't have a Corvette guy reviewing working man's cars. They too often just don't "get it".
  • Haze3 Near must have... car guy make car, software guy make software THAT I CAN USE EVERYWHERE and not just on some specific brand of truck/car/suv.
  • Wolfwagen If there is no Rust or rot this would be a good buy when MB craftsmanship and engineering meant something. While I prefer the 500 or 560 for the larger engine, this is good
  • Wolfwagen Tim, Now you should ask the B&B who we want to succeed and why. You could limit it to EV or non- North American MFGs.
  • TCowner I consider it mandatory for the navigation purpose - using a phone in a Weathertech cupholder in my old Town Car just doesn't compare. However, I don't use it for anything else (i.e. music, etc) and don't find that important.
  • THX1136 No smarty pants phone, no interest in mirroring.