By on November 14, 2009

As in Shiva, The Destroyer. It strikes me—has for some time—that nothing short of Chapter 7 could possibly “save” GM. (The title of GM Death Watch 1: “GM Must Die.”) The underlying idea is simple enough: capitalism is creative destruction. When something sucks, blow it up, start again. If the RenCen Mothership had been allowed to implode, its constituent parts (i.e. the brands, facilities dealers and talent worth saving) would have had a better chance of survival. As it stands now, with Fritz “The Lifer” Henderson and Ed “Everything Looks Like A Nail” Whitacre in charge, New GM is on a bear hunt (stumble trip, stumble trip, stumble trip) and they’re going to catch a big one (total dissolution). Alternatively, it’s like watching an endless, frame-by-frame version of MTV’s Scarred. With apologies to anyone who connects this video to “Buda’s wagon,” my question to TTAC’s Best and Brightest: what else needs blowing-up in the auto industry? The dealer experience is an obvious candidate. I nominate lapdog journalism. You?

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10 Comments on “Ask the Best and Brightest: Sitting Shiva?...”

  • avatar
    Cammy Corrigan

    One things which does need blowing up is current rules on how statistics are gathered on who is the biggest car company by sales volume.

    GM were a big offender of this, which is why I’ve always held the belief that they were never as big as they thought they were. I’ll come to that later.

    Industry practice is that companies cannot count other companies which it has a shareholding in unless they own more than 50%. But GM kept using minority shareholding in Chinese ventures to bump up their figures. Recently VW have been accused of that, too. If they want to include share holdings (and I’m still in two minds about this) why can’t they do a proportional share holding for sales figures. So say Ford has 10% of Mazda and Mazda sells 1 million cars in a year, then, Ford can tag 100,000 cars on their sales figures? Very simple.

    Also, define what is a “sale”. Some companies define it as when the car goes to the customer and some companies define it as when it goes to the dealer. Which is it?

    Now back to GM. The reason I trusted their sales figures is because of 2 reasons:

    1. They used minority share holdings, when they were allowed to, yet the figures were allowed even though other car companies stuck to the rules. Hence, why Toyota was actually number one in terms of car sales volume in 2006, not 2008.

    2. One of the B&B (can’t remember who) said that GM define a “sale” as when it goes to the dealer. Which got me thinking. If GM define that as a “sale”, then, couple that with another fact. What was one of the GM dealers’ biggest problems? Too much inventory! They had nearly 3 to 4 months’ worth of stock on site, when transplants only had about 1 to 2 months’ worth. They couldn’t sell the cars which were channel stuffed. So I ask, was GM’s sales figures really as big as they pupported to be?
    With clear set of rules which EVERY car company adheres to, we can get an accurate portrayal of how many cars are being sold by each company, which can lead to more accurate pictures of the companies health. The other metric being profits, but even that can be fudged. Look at the banking sector….

  • avatar

    That video is better than The Transformers.

  • avatar
    George B

    I vote for blowing up the current two fleet Corporate Average Fuel Economy system that has given us inferior domestic small cars.  No way decontented to death domestic small cars like the Cobalt and Focus would be built in the US at a loss except for the separate accounting of domestic and imported models for CAFE.  Let automakers build better small cars for a world market and import part of the production to the US.

  • avatar

    Let’s adopt Euro NCAP. No more Federalization costs and we could shrink a few government agencies in the process. Same for emissions. Test once, sell everywhere.

  • avatar

    What else needs blowing up? I nominate dealers foisting lot cars on buyers. If I ever purchase a brand new car again, I will factory order it. I am old enough to have developed patience, certainly enough to wait 6 to 10 weeks for my brand new car to arrive. I long for the days when options on cars weren’t limited to focus group determined trim levels and option packages.

    Way back when my father received a new company car every two years or 100,000 miles, whichever occured first. I was just a wee lad in 1965, when he was getting a new Plymouth Fury and I have fond memories of perusing the brochures from the dealer. My brother and I were allowed to choose the paint, fabric and trim colour. Of course it had to meet with parental approval; we chose wisely and well, deciding on  beautiful royal blue colour, with matching interior, and fabric, not vinyl, seating surfaces. It took several weeks to arrive (it seemed like months to us boys) but it was exactly as we had chosen.

    I would love to be able to walk into my local dealer and order a vehcile with soemthing other than a grey or black interior, and trim accents that match. I would also like to be able to order a sunroof without having to fork out money for addtional options that I don’t need or want, like a nav system.

    I also want to be able to order any vehicle with a stick. Whether it’s a full sized truck, or econobox or even a sport luxury CUV, I want a manual transmission.

    • 0 avatar

      All of that costs money, and cars are far more expensive to design now than in the “good old days”, and so any car company that implements such things would be working at either lower profitability or higher prices — on smaller cars, probably no profitability.  It might be nice for the consumer, but I doubt it would be that nice, nice enough to draw them towards a car they didn’t otherwise want.

  • avatar

    Euro NCAP isn’t even a regulation! There are, however dozens of regulations that are similar but not identical, between the US and the EU that could be harmonized. Work has started on that but progress is understandably slow. One huge difference is that Europe uses witnessed testing of the design. Once witnessed, all vehicles of that design are assumed to meet the law. In the USA, the companies self certify and that means they have to take statistical variation into account so that essentially 100% of production is fully compliant.  In Europe, if the witnessing agency has signed off on your design and you don’t change it, the lawyers are pretty much blocked from suing. In the good old USA, even if every vehicle  complies with the law, the lawyers will still sue if the manufacturers have not provided the best possible design or even if the accident was caused by the vehicle occupants.

    • 0 avatar

      Unifying US and European regulations would definitely make life alot easier on the manufacturers, and would enable some of those appealing European-only cars to come over here much more easily and cheaply than is the case currently.

      Killing the current dealer system and implementing something more like the Apple Store idea would probably help efficiency a great deal (building for demand and not just building for dealers) and improve the customer experience by a massive amount.

  • avatar

    Too high  regulatory costs, prevent small innovative companies from entering the market. The government is protecting a small cartel of very large industrial companies. Reducing regulatory costs, and encouraging new entrants, would lead to better cars at lower cost. Michigan probably has a vast amount of unused brain power which could design better cars than the 3 stooges (GM, Ford, Chrysler) if they were allowed to.

  • avatar

    I see that Agni must have been sitting on your shoulder as you wrote this particular Satya about cars.  As the resident GM defender in a way, I feel it necessary to say that C-11 with the 363 provision was new GM’s Kali.  A re-birth via C-7 isn’t needed.
    To answer your question, are those red-light cameras really essential?

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