Hammer Time: Investing in Detroit

Steven Lang
by Steven Lang

I love investing. Not so much the garbage that comes from Wall Street infomercials or the ‘Get Rich Like My Dad’ crapola. I’m talking the real thing. A group of folks that take their money and smarts, and build something awesome. Computers. Schools. Lights. Movies. Paints and Wastebaskets. We may laugh at the minutiae of it all, but if we take the time to look between the lines of any great product, we can always find the beauty that makes that product worth buying. That’s because in certain businesses, those who are passionate about their work can influence the outcome. In the case of Chrysler and GM we’re the investors. But how can we get out?

By taming the ‘legacy’ shrew. GM and Chrysler have for decades hired too many people for too many things, and paid them too much money for it. GM had eight divisions and a multitude of fiefdoms that drove it to bankruptcy. Chrysler? They sold their soul to whatever devil happened by. We see the substandard mediocrity that came with all this. But despite the four figure cost disadvantage these companies hoist, they still make a lot of great products. Many of them are even fun. And unlike most modern day Toyondas, some of them even have a soul.

Today’s question. How would you tame GM and Chrysler’s legacy shrew. If you, Armchair CEO, were to invest your time and money in any five Chrysler or GM vehicles, which would you choose? Since we now own ChryCo and New GM, which five products would you like to have divested in all due haste? You can justify your choice with either passion or profit.

Steven Lang
Steven Lang

More by Steven Lang

Join the conversation
4 of 28 comments
  • George B George B on Jul 13, 2009

    Rebrand New GM as Chevrolet and match Hyundai's 10 year warantee. Chevrolet focuses on the basic transportation needs of American families, but with more style than the equivalent Toyota. Continue to invest in: 1) Chevrolet Cruze (entry level small car) 2) Chevrolet Malibu (average sedan) 3) Chevrolet Silverado (need a full size pickup) 4) Chevrolet Transverse (need family transportation) 5) G8 as new Chevrolet Impala (bigger, better than average sedan) I like the Camaro, but for a volume brand it makes more sense to build RWD G8 based Impalas in North America instead. Spin off Cadillac/Corvette/Volt as a separate lower volume luxury car business that buys Chevrolet engines, transmissions, heaters, and air conditioning, but zero interior parts. Separate the higher-end luxury business from the Chevrolet bean counters. Spin off Buick to a Chinese company. Chrysler is Fiat's problem now. Let them sort out the inevitable liquidation.

  • Ronnie Schreiber Ronnie Schreiber on Jul 13, 2009

    I'm going to suggest something counterintuitive. What GM needs is a Cadillac flagship, maybe the Cadillac Sixteen with a dual mode hybrid drivetrain for green cred. The Lexus brand has been a tremendous boost to Toyota's image. Going head to head with Mercedes and BMW with the LS sedans gave them great credibility. Hyundai is trying the same strategy with the Genesis and Equus, taking it a step further by dispensing with a separate luxury marque like Lexus or Infiniti and selling the luxury cars from Hyundai stores. Right now GM has no flagship sedan. Cadillac once indeed was the standard of the world. Companies in other industries named themselves "Cadillac" to bask in the reflected brand equity of GM's luxury marque. Such was the reverence for the old Caddies. The CTS may be a fine car and hold its own in that market segment, and the CTS-V, like the ZR1, puts many Euro sports sedans to shame, but Cadillac needs a full size sedan. They already have a fine RWD platform that underpins the Camaro, G8 and the Australian cars on which they are based. Then, as long as every car they introduce from here on out is at least as good as the Malibu, GM might survive. BTW, I wouldn't kill the Jeep Patriot, though obviously the Caliber and Compass must go. It's available with Jeep's credible "trail rating" and an entry level Jeep below the Wrangler isn't necessarily a bad idea.

  • BigOldChryslers BigOldChryslers on Jul 15, 2009
    Actually, Nova would have been a good name for an advanced-tech vehicle but instead we get the lame “Volt” for an EV. How imaginative. Not. And Opel was to get the “Amp.” Actually, Nova would be a questionable name for the Volt. The first time a battery catches fire, the car would be nicknamed "Supernova" (ie:exploding star). GM should've branded the Volt as a Buick so they could revive "Electra". An appropriate name with historical significance!
  • Anonymous Anonymous on Jul 15, 2009

    [...] Go here to review a rest: Hammer Time: Investing in Detroit | The Truth About Cars [...]