By on February 13, 2011

Bloomberg seems to think GM is heading back towards bad habits, reporting

General Motors Co. is offering to waive the last three payments on existing leases if holders buy a new car, adding an incentive onto deals that last month exceeded offers made by rivals.

The promotion began this month and is valid on most models with leases that expire between now and Aug. 31, according to the company. GM raised incentive spending in January by 16 percent to an average of $3,663 per vehicle, the highest among major carmakers, according to researcher Autodata Corp. GM sales outpaced the industry that month.

GM said in a video presentation for its initial public offering in November that it intended to offer fewer incentives that crimped margins and created an impression that price was the main selling point for GM vehicles. Early-return leasing deals may conflict with the that pledge, said Jessica Caldwell, an analyst at Edmunds.com.

“I hope they’re not walking down that road,” said Caldwell….

Given GM’s decision to release less incentives data, the signs do seem to be piling up. But, says Chevy marketing VP Rick Scheidt

I am not seeing any internal behavior that suggests we have gone back to old ways. It’s still way too close to the bankruptcy for us to be sliding back into bad habits. We know everybody’s watching.

Another perspective on GM’s move towards subprime lease deals comes from Automotive News [sub]’s Donna Harris, who writes

The credit crisis and recession expanded the subprime segment. Some of these “new” subprime customers walked away from their mortgages when their property values plunged. Under normal circumstances, they would pay their bills on time.

A lease can coax these people back into the new-vehicle market at affordable terms while helping GM move some metal.

Vehicles are typically leased at shorter terms than finance contracts — often three to four years, as opposed to five years or more for a car loan. So the customer will be back for a new vehicle quicker.

And the subprime lease can improve customer loyalty: Research has shown that customers are extremely loyal to businesses that help restore their credit. Lease renewal rates also are typically much higher than repurchase rates.

All of which makes a certain amount of sense… if risk is being managed well. Given the post-bailout concern over moral hazard, however, it’s hard to just sit back and trust that these leases aren’t simply re-inflating a subprime bubble that will necessarily pop again. Meanwhile, concerns about the larger market aside, GM is running yet another risk with its lease deal: it’s offering cheap terms on its latest vehicles (including Equinox, Cruze, and Traverse) potentially eroding gains in resale values, brand equity and average transaction prices.

It seems that Hyundai’s John Krafcik may well be right… it is beginning to look like GM is pushing the industry into a price war.

Get the latest TTAC e-Newsletter!

108 Comments on “Do GM’s Lease Offers Signal Return To Bad Habits?...”


  • avatar
    Crosley

    Why not offer risky promotions like this, it’s not their money.  The US taxpayer is propping up both GM and their financing operations.
     
    Definition of moral hazard- The prospect that a party insulated from risk may behave differently from the way it would behave if it were fully exposed to the risk.

  • avatar
    PeriSoft

    ” It’s still way too close to the bankruptcy for us to be sliding back into bad habits. We know everybody’s watching.”

    …But once the coast is clear, it’s party time!

  • avatar
    MikeAR

    I’m not defending GM here but they may just be the first to realize that their product is just too expensive. I don’t mean that just GM vehicles are too much but that everyone has their product priced too high. Incentives and cheap financing may make that less of a problem but I thiink that the first maker to drop their list prices down by some percentage just may start the ball rollong for everyone. If it means decontenting, no problem, most cars have too much junk on them anyway.

    For example, Karesh reviewed a Suzuki Kisashi last week, it was a good review as have been all the others I have read on it but the price was $26k. I had thought that the Kisashi was a $20k car. At 20k it is a great car but at 26k it’s too much and is in a too competitive segment. There aren’t that many vehicles that are good enough to command a premium now but at a lower price they would be very competitive and offer value.

  • avatar
    Steven Lang

    Actually GM is responding to Honda who has been pushing cheap leases for nearly six months now.
    Toyota, BMW, Ford, Nissan… all of them are pretty much doing the same thing now.
    The only different ingredient in all this is that GM now has stronger resale values and the Americredit acquisition is enabling them to have the potential for far greater success in the sub-prime markets.
     

  • avatar
    obbop

    I wonder to what extent the convoluted pricing schemes/plans include fudge factors for future use to allow apparent consumer cost savings to ensure an acceptable profit remain despite the “price decrease” especially  when the planned price cut is merely planned to be temporary?

  • avatar
    CJinSD

    Sell to people with a proven track record of making bad decisions in order to make them loyal customers? The business plan of crack dealers…and GM.

    Bloomberg isn’t exactly breaking a code to discover this. Haven’t we all known since first seeing GM’s November production numbers compared to their sales that they were packing them deep and inevitably going to have to sell them cheap? Resale value for GM products? Even big-3 pickups are all over the place with fire sale prices now. How can anyone claim the UAW Daewoo will hold its value? Did the Cobalt? Have many used Cruzes already been dumped by their first owners?

  • avatar
    Detroit-X

    For a couple months now in the Sunday paper, GM dealers have been advertising GM employee Cruze leases for $153, 12k miles year, $0 down. $26 more will get you a Malibu. I’m not sure what the rate is for the non-employee, as they are not given.

    In general, it’s really odd how the Detroit-3 dealers around here go after only the low commission employee sale in their ads, and 80% of the time totally ignore (give no prices) for the general public.  Odd, odd, odd. It’s like… you have to urge the employees to buy their own product at a discount rate. Chrysler has half-price deals on it’s cars. Ford has something harder to figure out, but it’s there. While GM has reduced their employee discounts so much over the years, many buy other products now.  

    • 0 avatar
      CJinSD

      Doesn’t it hurt their chances at selling to the general public? Personally, I never buy from someone who targets their advertising and discounts at groups I’m not a member of, and I’m not a part of any entitled group. It is undemocratic to treat people differently based on classifications, and it makes even less sense to send the message that the people who make the sausages need to be coerced to eat them.

    • 0 avatar
      PeriSoft

      “I never buy from someone who targets their advertising and discounts at groups I’m not a member of”

      So you let marketing executives determine your product choices for you? You rebel!

    • 0 avatar
      CJinSD

      And you gladly subsidize someone else receiving what you work for that they don’t even want. Enjoy your sarcasm, but there was nothing rebelious about my post. Just rational.

    • 0 avatar
      PeriSoft

      “And you gladly subsidize someone else receiving what you work for that they don’t even want.”

      What? Ooohhh, you’re still on the whole ‘government motors’ thing, aren’t you? I forget that the smell around here is the dead horse that keeps getting beaten on. Yeah, the government did something; call in the troops! – wait – damnit, they’re government troops! They get you coming and going!

      Anyway, the GM bailout has nothing to do with this. Find me a carmaker that doesn’t have employee discounts, and I’ll be pretty surprised. Find me enough of them that your argument that GM’s employee discounts are somehow indicative not only of bad performance but of ill-spent taxpayer income, and I’ll be really, really surprised.

      You want to make an argument about whether the bailout was a good idea? Fine – but your (and others’) incessant straw-grasping, trying relentlessly to attach the GM bailout to every potentially negative situation dilutes any legitimate arguments you have. And then you end up looking like the guys who come into a discussion about knitting yarn and link it up with a 9/11 conspiracy. And nobody wants to hear about knitting conspiracies.

    • 0 avatar
      doctor olds

      It is not odd at all, given that a huge share of the buyers in SE Michigan get employee or relative discounts.
      btw- Every maker has comeon, low price advertising. i.e.- $129 a month (with $3,995 down!)
      In addition, the employee prices are not very much less than anyone can get anyway. The deep employee discount is long gone!

    • 0 avatar
      jkross22

      “Ooohhh, you’re still on the whole ‘government motors’ thing, aren’t you? I forget that the smell around here is the dead horse that keeps getting beaten on.”

      Wow, raw nerve?

      Take a breath and then re-read the title of the article.  It would appear that indeed GM is reverting back to the silly leases that got them and some of their customers in trouble.

      Nothing more, nothing less.

      Impassioned debate is great… taking things personally isn’t.

       

  • avatar

    the bottom line is that they do no know how to sell cars so they have to give them away. old habits haven’t returned, they never left.

    btw… the Cruze advertised above is not available with Cruise, sorry

    Lacrosses aren’t made Red
    Enclaves aren’t made Blue,
    yet the deals are sweet
    if distress is for you…

    See The Buickman on FaceBook.

    • 0 avatar
      Toad

      New GM = Old GM – debt + government cash.  Nothing really changed except the balance sheet, and that may revert to form.  Unfortunately.  Meet the new boss, same as the old boss…
       
      On the other hand, Chrysler may be coming around thanks to completely new management, priorities, and vision.  It will be interesting to see the contrast between how the two companies evolve.

    • 0 avatar
      Natasha

      dang it!! why does this elude them so?  it is infuriating

  • avatar
    Educator(of teachers)Dan

    To quote country music legend George Strait;

    “Diablo Motors had a hell of a sale downtown yesterday, word got around no money down, take years and years to pay.  When I got there the lot was bare but the salesman said “hold on, for a little cash I got a two tone Nash out behind my barn. 

    If the devil danced in empty pockets he’d have a ball in mine…” 

    I agree with Buickman, if you have to give something away then you must not know how to sell it. 

  • avatar
    Dynasty

    If they just put an additional average of $3,663 worth of quality into each vehicle they sold, GM would not have to resort to incentives to get people to buy their products.
    Seems to me, on just about every vehicle they manufacture, they are pretty much 90% of the way to having a nearly flawless vehicle.  Or at least 85%.  An additional $3600 devoted to each vehicle in the form of more refined engineering and design, better materials, and manufacturing processes would go a very long ways.
    But then again, in the short run we cannot see further than the length of our nose that is typical of American businesses, saving 3600 dollars per vehicle…… seems like the logical choice….. only to have to offer up $3600 to get people to purchase.
    GM executives must have severe memory problems.

    • 0 avatar
      Patrickj

      I don’t think it would take even that.  I sat into a number of GM vehicles at the auto show in DC a couple of weeks ago.
      The only purpose I could see for the cheap seat fabrics was to get me to spring for leather seats. But cheap cloth seats were hardly unique to GM.

  • avatar

    This reeks of desperation. (Or maybe that’s just the outgassing of those Daewoo plastics in the Cruze.)
     
    And here, I thought GM sales were up… if its press releases are to be believed…?!?

  • avatar
    segfault

    Honda will lease you a Civic LX with automatic for $200 per month with zero down.  Honda’s lease also includes gap protection at no extra charge.  To the Cruze’s credit, it has stability control and the Civic doesn’t (I thought Honda had promised to make it standard by the end of 2010 but it’s not on the 2011 model unless you get an SI, Hybrid, or EX-L).  In spite of that, the fact remains that the Cruze is not competitive with the Civic on lease prices.

    • 0 avatar
      CJinSD

      That’s because a three year old Civic is still worth something. Lease payments can be lower without hurting profitability when cars have high residual values. A $219 Chevy lease is just a matter of taking a loss now and later.

    • 0 avatar
      daga

      Quite right CJ.  Civic LX-AT 36 month ALG is 61% and the Cruze 2LS is 51%.  Even worse at 60 months: 47% versus 34% residual value.

      http://www.chevrolet.com/assets/en/images/pricing/currentoffers/promos/hevy-cruze-car-lease-deals.jpg

    • 0 avatar
      Acc azda atch

      Saying the CRUZE has stability control and the Civic doesn’t, says LESS than NOTHING about the CRUZE.
       
      The Civic may be a bloated, anemic, boring as all hell to drive, gutless car, but its at least a guarantee and after 30yrs of being built their quality is definitely better than CRUZE.
       
      UCK…
      I’m still pissed off that the CRUZE is built in the same Lordstown factory as the Cobalier, and yet it wont have a hatch and ISN’T class leading in ANYTHING. 10airbags doesn’t say anything, nor does ONSTAR or their stupid stabillitrack b.s.
       
       
      Id buy the Honda knowing ya got a solid vehicle.

  • avatar
    SunnyvaleCA

    I always just assumed that this was a sales and marketing strategy.  Pretend the vehicle costs $26k but then always give $4k in discounts.  People think they are getting some kind of bargain.  This tactic will work less well if people become more informed using the internet.

  • avatar

    you can have the best joke in the world but if you don’t tell it properly, it isn’t funny. when GM couldn’t sell Pontiacs they shouldn’t have got rid of Pontiac, they should have got rid of the failures who were running Pontiac. at GM the results don’t change, just the excuses. yet they continue to rotate people as if the structure will make up for not knowing strategy. it’s like DeLorean tried to tell them “you don’t teach a man to play football by making him the coach”.

    • 0 avatar
      mikey

      @ Buickman….Its funny you should mention that. I can remember GM bringing in young,educated and some brilliant people in. They would leave them on the plant floor for the wolves to devour.

      I shudder to think of the talent,that walked out the door.

    • 0 avatar
      jkross22

      +1.  GM is one of the few non-public institutions that really operates like a public institution.  It’s ironically sad that the real opportunity to turn GM around was squandered under the non-bk bk they went through.  GM is the antithesis of a meritocracy.
       
      In capitalism, only the strong survive, unless you’ve got the right friends.. in that case, even the weak will be maintained on the backs of the taxpayers.

  • avatar
    PeteMoran

    A coupla’ months of short-term sales bumps with enough financial fuzz around how it was done and another tranche of stock is magically offered?

  • avatar
    tparkit

    It’s a sign of serious weakness.

    Ray DaHood an da Chicago Boyz will hafta find sumpin at Hyundai — mabbe bad brakes, mabbe unsafe workin’ condishuns…

  • avatar
    Motorhead10

    Lock up period ended Jan 16, 2011

  • avatar

    I would have to say that anytime you rely upon debt to sell cars or anything for that matter, that eventually it’s going to come back and bite you. I’m not shocked to see them do this, but then we’ve pretty much taught them that we’ll bail them out should it come down upon them.

    • 0 avatar
      doctor olds

      If you mean consumer debt, I wonder who you think is paying cash for new cars? Essentially all of them are financed.

  • avatar
    doctor olds

    GM has to meet the competition, which is all they are doing.

    There is really no reason to worry. Their sales are much more profitable- The new LaCrosse selling prices, for example, have been $8,000-$9,000 more than the previous model! In Fact, hot selling, profitable new models have pushed GM’s market share up over 20% (they grew about half the size of VW from last year!).

    GM has the highest plant efficiency of the Detroit 3, second among all car maker’s plants in the U.S. according to independent Harbor Report. They made a lot of money last year despite a still very weak U.S. market. They have caught back up to Toyota, only 30,000 behind globally in 2009 (less than 4/10 of one percent!). They have very little debt and are on track to make industry record profits this year.

    I can’t help but note that most commenters appear quite unaware of the real facts around the GM collapse. The truth is that Ford would have been in the same boat if not for the huge credit line they established by hocking everything, including corporate HQ and blue oval itself well before the financial crisis of ’08 collapsed the car market, largely due to the resulting credit freeze.  

    GM under Rick Wagoner was almost turned around. The UAW contract of 2007 is the most significant enabler of profitability for all three Detroit car makers today. Certainly, the improved balance sheet and debt that was dumped via bankruptcy are big factors as well, but the new GM is a far different company than the old.

    To set the record straight, GM is not receiving any more assistance from government. They financed the bankruptcy and took an ownership stake in the company. All borrowed money has been repaid. The stock is growing at a rate that is likely to return all of the taxpayer’s investment when the remaining stake is sold in the next few years. (Truth be told, no ones taxes actually have been affected!)

    • 0 avatar
      Motorhead10

      we can make generalizations all day if you want – but how about some supporting data

      lowest transaction prices on LaCrosse I have is $27100 in November of 2008. Incentives that month were $2300. Lowest net transactions I see were March 09 @ $27800 with $4400 in incentive – for $23400. Last month LaCrosse was $33800 with $3100 in incentives – by my math that is $7300 –  so $8000-$9000 may be a bit of stretch – but directionally you were right on target. BTW, unit volume in Jan 2011 was 3771, which is 11% less than the 4246 units of January 2010 – and 46% off the peak of 7047 units in July 2010.

      Also – what exactly is the “rate” the stock is growing at? It’s up 10% since the IPO but down 6.8% since peaking at $38.98 on January 7. Are we assuming 10% annual returns? Based on what, three months of trading history? So 30% annually, what about the last month of trading -6%, so -72% annually?

      I really don’t care whose god you follow or whose promises you swallow (RIP RJD) but give the B&B a little more mental credit than expecting that string of vagueness to flush.

    • 0 avatar
      Educator(of teachers)Dan

      Perhaps Buickman could comment on what transaction prices have been at his dealership.  Up or down?

    • 0 avatar

      Rick Wagoner was a puppet for the Illuminati banksters who stripped GM then flipped it thru gov’t ownership. he belongs in prison and you are either completely naive or a stooge.

    • 0 avatar
      Natasha

      I know absoultely nothing… but you are making sense to me.  I so want GM to return and take the country by storm…. is it really possible?

  • avatar
    ixim

    In 1999, and again in 2004, I benefited hugely from GM discounts – 12K/yr leases on $30K+ cars for about $250/mo AFTER cashing in my GM credit card $$. That got me around the weasel extras. GM lease today are too costly, although most of these cheap lease offers are full of small print conditions like big $$ cap cost reductions; low miles/yr; turn-in fees and the like. One $89/mo Corolla offer near me [NYC suburbs] comes with ZERO miles – they cost extra! Right now, Toyota and Honda are offering $25K cars for about $2K in fees, etc. and about $250/mo. That’s cheap, but its not like getting a free car. All part of capitalist competition, for those who still think GM = “Government Motors”.

  • avatar
    GarbageMotorsCo.

    CTS – $138.00/month

    SRX – $209.00/month

    http://www.olsencadillac.com/NewModelsPage

  • avatar
    doctor olds

    Several of you seem to think you know the business because you sell cars, or even simply because you think you know how to drive one. Anyone using the popular media as their information source is woefully out of touch with reality. Speaking of which, Buickman needs to get back on his meds!

    First the facts, then my credentials. 

    Prices from the old style LaCrosse to the new – up $8,000-$9,000. Wards Auto World.
    http://wardsauto.com/ar/buick_revival_results_100120/

    It is a fact that GM is making a lot of money- supporting data: $2.1Billion profit in NA in the third quarter alone! Over $4Billion profit YTD through the third quarter.
    Market share growing, now at 21.9% in January, according to Wards (a gain half the size of VW’s entire U.S. sales!) 

    They are on track to make a lot more this year, with even modest recovery of the market. Like it or not, they have been allowed to carry forward $45Billion in tax credits due to the losses of old GM. With all profit going to the bottomw line, the company will be debt free very quickly.

    This is on the strength of well received new products. GM plants are running very close to their capacity at the best efficiency of any U.S. company, just slightly behind the leader, Toyota. This is according to the independent Harbor report. GM second at 82%, Toyota 86% (Ford 75%)

    Moments ago, GM stock was $36.54, up 10.7% in the 88 days since the IPO. Including this downward move, that is an annualized growth of over 44%! Only time will tell what the long term rate of growth will be, but analysts expect it to go much higher, along with the huge profits likely to unfold in the coming months.  

    You may brush it aside presumptuously, but I will put my auto experience and qualifications up against anyone, anywhere.
    A mechanical engine, I retired from a 30 year career with GM just as the financial crisis of ’08 collapsed the car market and with it the industry. With assignments in the sales, quality and product engineering staffs, my experience ranges from the plant floor to the show room floor and includes the dealer service department as well as directly interfacing with senior executive leadership in GM.  I rode the Oldsmobile skyrocket to the top painfully lived through the subsequent decline, first of my division and then the whole company. I love the business and have paid very close attention for over 40 years now. I lived through, and vividly understand the dynamics of the business.
    As for Rick Wagoner- I did not report to him, but did have great respect fo all the steps that were taken, first to revitalize GM’s products and then the breakthrough UAW contract that would finally remove the $7Billion a year drain on the bottom line of UAW retiree health care as well as about $1Billion for the jobs bank.
    GM’s collapse came as a direct result of the global financial crisis of October, 2008. Even Toyota was dragged to its first annual global loss in 57 years due to just 2 1/2 months exposure to the collapsed U.S. market. They went on to lose more money than GM in the first quarter of ’09.

    These are the facts, and nothing but the facts.

    • 0 avatar

      your facts are obnoxious deviations from the truth. bottom line… Red Ink Rick was a crook and a puppet ffor the Banks who stripped and flipped GM. they robbed it of all assets not tied down and laid the liabilities on the American public. GM is a corrupt institution who has preyed on the weak and now pretends to represent America while they continue to sell out the USA.

      all the PR in the world and moles like you planted inside blogs cannot change the evil that exists atop General Motors.

    • 0 avatar
      Motorhead10

      “Anyone using the popular media as their information source is woefully out of touch with reality.”
      and then you cite a Ward’s article

      GM’s collapse came as a direct result of the global financial crisis –
      but it’s 2010 profits are all their own doing?

      “analysts expect it to go much higher” – I’m an analyst, I don’t expect it to go much higher. Nor do I expect the cost structure to ever be as lean as it is in this window. What additional costs can be cut from the system? Interest expense? Raw materials? Labor costs? Healthcare? those little mints in the urinals? Where will earnings GROWTH come from, loss carry-forwards? An explosion in Buick LaCrosse sales at higher transaction prices? 

      Seriously – extrapolating GM’s trading history into annualized returns is beyond useless and really indicates a lack of understanding about the way markets work. So essentially, any investment instrument that is up today (or this week, or this month or this year-to-date) can be straight-lined into an annualized return that actually means something? So why not buy every stock that has a postitve return today, or this week, or this year-to-date and take those annualized returns as a given?

      Personally, I don’t care what you think or believe – but your presentation of the logic is flawed. It’s the internet, you can hold yourself up as an expert about GM because you are a “mechanical engine” but to assume no one but you (and Rick Wagoner) understand the business is not the way to win friends and influence people. In fact, being such an expert on all things GM from the inside out – why would you live through the subsequent decline of the Oldsmobile skyrocket? Didn’t see that coming? Or was Olds a victim of some conspiracy none of us “outsiders” could understand?

    • 0 avatar
      jkross22

      How many tax credits did GM bring with them out of their bankruptcy?

    • 0 avatar
      Natasha

      You give me hope, doctor.  So…. refreshing.

  • avatar
    rmwill

    Spoken like a real GM groupthink lifer.  Cheers.

  • avatar
    doctor olds

    “Given the post-bailout concern over moral hazard, however, it’s hard to just sit back and trust that these leases aren’t simply re-inflating a subprime bubble that will necessarily pop again.”

    There is absolutely no relationship between the subprime housing bubble, which demolished the financial system through credit default swap derivatives, and auto leasing. 

    Autos are easily repossessed, and most customers do not default on their payments. The auto collapse was due to lenders, the banks, losing liquidity with the amplified losses deriving from the real estate bubble collapse. Remember what TARP was supposed to do? Add liquidity so banks could start lending again.

    Credit became unavailable over night in the midst of an economy already in recession.

    And talk about the pot calling the kettle black! Hyundai, with help from Korean government protectionism and currency manipulation comes here with rock bottom prices and complains that GM is too aggressive in meeting their prices head on! The General is strong, getting stronger, and is taking the gloves off! GM will be the largest auto maker in the world again this year and will accelerate away from Toyota with the best products at the best prices. 

    • 0 avatar

      the General is a farce with material weaknesses in the financials not unlike every other year. a company unable, or unwilling, to produce financials the last two years that, If properly disclosed, would have revealed the shenanigans and outright theft. GM is a joke and absolutely not to be trusted. take it from me, I know more about General Motors than anyone alive and am their top salesman of all time. and I say they are run by incompetent, self centered, egotistical, pompous pretenders who couldn’t last one month selling cars. and that is why GM is a failure, absolutely zero knowledge of retail automotive. oh, and btw…Girsky is nothing more than a common thug, and you can take that to the bank! Morgan or Goldman, whichever you prefer.

    • 0 avatar
      mikey

      @dr olds……As a GM hourly retiree, I love reading comments like yours. Don’t stop.

    • 0 avatar
      jkross22

      doctor olds,
       
      When will you start singing, “See the USA in your Chevrolet”?  I’m sure nearly all of us are cool with interesting debates on opinions, but your posts read like pr generated by GM:
       
      “The General is strong, getting stronger, and is taking the gloves off! GM will be the largest auto maker in the world again this year and will accelerate away from Toyota with the best products at the best prices. ”

      Be honest – how much is GM paying you?  Or are you posting in the hopes that the price of your stock goes up?
       

  • avatar
    Bridge2farr

    Do you get the impression that Buickman iis pretty fair and open minded in his rants against GM? Or is he just frustrated over the loss of the Electra 225?

  • avatar
    oboylepr

    Do you get the impression that Buickman iis pretty fair and open minded in his rants against GM? Or is he just frustrated over the loss of the Electra 225?

    It’s hard to say but I do know he cares deeply (or once cared deeply) for GM. His dislike for the charactors atop RenCen is not the same as mine. For me, having owned 3 GM vehicles that were the most unreliable POS’ imaginable, 3 vehicles that robbed me blind in their insatiable desire for new parts, are the reason there is no love lost between GM and I. I have read most of what Buickman has had to say on this blog since it started and if I read him right I would say that his anger at GM is because a steady stream of bad managers and a corrupt corporate culture allowed a once great automaker to fall to the point of total failure. He takes it personal!

  • avatar
    doctor olds

    Buickman- a disgruntled car salesman, for gods sake! The only occupation with a lower credibility rating than a congressman!
    Was your dealership closed? Or was some GM field manager just mean to you?

    If you claim I am wrong, bring some facts to refute me, not wild hyperbolic fantasy.
    Opinions are like assholes you know, everybody has one. My professional life taught me to investigate reality and get facts to inform decisions and opinion.

    As a publicly traded company with outside directors, and even while wholly private and mostly government owned, GM’s finances have been transparent. They announced quarterly results for the first three quarters and 2010 year end should be due soon. They made well over $4Billion, 3rd qtr ytd. That is a matter of public record.

    I suppose no amount of factual, verifiable information matters to you. You seem to believe in the bogeyman and are convinced there are magical, apparently and evil machinations behind the scenes that are kept hidden from the world. Are you nuts? 

    • 0 avatar

      ok doctor,

      tell you what you can do if you really would like  to know who I am. go to http://www.GeneralWatch.com and/or see my FaceBook page The Buickman. for the record I am the top GM salesperson in history and have been the GM of different stores. my track record is beyond anything you can produce in automotive retail. check it out chili dog, then apologize, or not… your insults are of no consequence to me.

      Buickman

    • 0 avatar
      srogers

      Sorry Doc,
      I realize that being a “mechanical engine” makes you a reliable source of business information, but I’d lay off the attack on Buickman’s character. He’s got a lot of history and respect here at the TTAC.

  • avatar
    tedward

    Two points.
    1. GM still has a few older cars on the market, so incentives are going to be skewed in a way that doesn’t accurately predict future performance. Nevermind the Korean price competition.
    2. How is the image, a $219 a month lease rate for the Cruze, showing an industry leading incentive position in the segment? From what I understand being over $200 a month on your Corolla competitor’s available payments is considered a failure.
     
    I’m sticking up for them here and I don’t like the company. My whole life I’ve watched them make shit cars, and the worst criticisms that I level towards Toyota all are in the context of GM’s past under-performance.

  • avatar
    jkross22

    dr olds,
     
    Without guys like Buickman, your career at GM would have been cut quite short.  Salesmen are the wheels on the truck.  Without them, you’re going nowhere.  You should remember his contribution to your career before asking if he’s nuts.
     
     
     
     

  • avatar
    Natasha

    @doctor…. going out on a limb here  I have done a wee bit of research and apparently this “buickman” was a phenomenal salesaman for GM.  Why would GM not hang onto him at the very least, if not willing to listen.  I don’t get it.  What went wrong here.  I am only interested in that I am intersted in GM as an american auto maker and damn it…. I love chevrolets.  eesh

    • 0 avatar
      Educator(of teachers)Dan

      Yup, Buickman has been here a long time.  He’s the real thing.  Doesn’t post as frequently as he once did, but he’s the real thing. 

    • 0 avatar
      mikey

      I’ve always had a great deal of respect for Buickman. Though lately I sense some deep bitterness. If it was something he wanted to share it with us ,I’m sure he would.

    • 0 avatar
      doctor olds

      GM does not employe salesmen. Every salesman works for an independent businessmand, a dealer. If he was let go, it was by an independent dealer. I spent 8 years calling on dealers, and I can assure you, they are very independent!

      Whether he can sell or not is irrelevent to the discussion at hand. He simply does not know what he is talking about with regard to the character of GM and the causees of their collapse into bankruptcy. He is also uninformed as to the true financial situation. Their balance sheet is very strong and this is public information.

  • avatar
    DenverMike

    doctor,

    If no one’s taxes were affected, where did the cash come from, the printing press? Isn’t inflation still a tax? And what is the actual profit margin on any GM vehicle? GM isn’t telling and isn’t impossible to tell until the sun sets on a platform’s entire run? The first 400-500,000 cars of any platform could be sold at a loss until it’s development costs are paid.

    • 0 avatar
      doctor olds

      DenverMike- Gee, if anyone’s tax rates have been increased, I sure missed it. When did that happen? You and I both know it did not. That is not to say it could never happen, but the fact is, the federal debt has temporarily gone up a little, relatively speaking. TARP totaled $800Billion or thereaouts, after all.

      GM has repaid the $6.7B that the Bush admin. loaned to keep them going until Obama was inaugurated. In fact, it was repaid with interest, thus- no cost to the taxpayer. Obama’s team chose to take 61% ownership of the new company in exchange for the remaining $40+Billion they invested to finance the bankruptcy. They have since sold nearly half their share in the IPO, returning around 1/3 (relying on memory) of that remaining amount. It has been reported that the stock will have to rise to $53 a share for all the money to be returned. The stock has gone up substantially, although it has receded a bit from the high. There was a big drop on January 29 for reasons I have not been able to find. Only time will tell if all the money comes back to the government, but it is sure that the maximum cost to the taxpayer would be less than $9Billion if the stock doesn’t go up a penny.
      Given GM’s new cost structure, strong sales growth and good profitability in a still depressed market, they are likely to report good year end profits well over $4Billion  for 2010 even if Q4 is breakeven) With the market recovering even weakly in 2011, they should make a lot of money, which will drive the stock price up. If I were a betting man, I would bet that the taxpayer will recover all of the investment and then some when it is all said and done. Then no ones taxes will every go up to pay for saving GM. No one has a crystal ball, and world events or other calamity could dampen thee market recovery, but cars don’t last for ever and demand certainly will increase in the coming months and years. A strong recovery will result in amazing profit from the new GM.

  • avatar

    listen up Doc, I forgot more about GM than you’ll ever know. the “material weaknesses” still exist as a disclaimer and the accountiing doesn’t comply with GAAP. Wagoner sold off the company and paid the capital to the banker dominated Board before dumping it on the gov’t. it was pre-planned and carried out accordingly. as to the character of those at the Ren Cen I assure I know from first hand experience that they are liars and cheats.

    please don’t say I don’t know the ins and outs. I’ve attended Annual Meetings since 1982, have read virtually every book written on the company, and visited more facilities and dealerships than memory allows. better check some source material bud.

  • avatar
    doctor olds

    Buickman, you just don’t have any idea what you are talking about, regardless of your high opinion of yourself. This most recent comment is just whack nuts!!! You really are a presumptous, yet amazingly ignorant twit. You may be able to fool some of the people all the time, but you can’t fool me!
    Wagoner sold off the company. What? How? Illuninati, backroom deals… Whack nuts!!
    GM has been fully transparent and publicly audited for many, years, long before you or I were born. They have long had outside directors and what you claim is simply not credible or even possible.
    You really don’t have a clue and are apparently twisted with mindless rage. You may want to seek professional help!

  • avatar

    audited by Deloitte, are you kidding me? the auditors for Parmalat and Adelphia. and who’s the nitwit? we’ll never agree and you’ll keep on drinking the Kool Aid.

  • avatar
    doctor olds

    We will not agree until you come to know current reality, which will be unavoidable very soon.
    Mark my words, GM is sure to report strong profit results for 2010. That is an easy given, since they just released the UAW profit sharing amount, which is derived from North American profits. In case you missed it, UAW employees will receive a record $4,000 compared to a previous high of around $1,800, according to press reports. And the market was still very weak in ’10.

    I also predict they will outsell Toyota world wide again in 2011 and recapture the number one automaker in the world. They were only 30,000 units behind last year, and are on track to gain far more than that volume on Toyota in the US this year, not to speak of China and the rest of the world.

    A lot of your views may have had some validity in the past. In some cases I actually would agree with you (Ron Zarrella!),but the new GM is a dramatically different company with a much better balance sheet and cost structure. You may have great knowledge of old GM, but that is history now. Will you apologize when my prediction comes to pass? I know what I am writing about, otherwise I’d keep quiet.

  • avatar

    when GM switches auditors, has a separate Chairman and CEO, prints a set of financials that does not include the phrase “material weaknesses in internal controls”, and streamlines the completely idiotic crossword puzzle mayhem with incentives, then I will admit progress is being made. however, to become a believer once again the salary Delphi retirees need to be made whole, the Board must diversify away from interlocking directorates and free itself from banker control, the marketing has to ditch the distress merchandising as well as the “hurry before it’s over” mentality.

    meanwhile son, let me assure you my understanding of the problems today at GM are not mired in the past and I have the concrete answers as to how to fix this broken giant. goodnite.

  • avatar

    oh,  and to claim GM almost caught Toyota isn’t of any significance. they had the biggest disaster in auto history and stayed number one. watch them in the next year or two as they leave GM in the dust. personally I see Ford also beating GM in the US market share within that same time frame. as to profits, they should be huge after sticking it to so many people and communities. and to pound their chests no less, taking bonuses while still encumbered to the gov’t. what a crock. don’t fool yourself, there is a lot of hatred for GM around the country from ex dealers, suppliers who went bust, retirees who lost pensions and benefits, bondholders who were wiped out, and shareholders who hung on til the end. but as usual, GM doesn’t get it.

    • 0 avatar
      doctor olds

      You know, I am a GM retiree.
      I read lots of comments venting hatred for GM. It is clearly drivng you. I can’t help but notice that many are also factually inaccurate. That is what I choose to address.

      GM leaderhip did not choose to fail! You imply they purposely did something to hurt all of the stake holders you mention. They went belly up. It is no game. All the money was gone!

      wrt Ford- GM gained share on them last year and are millions of units ahead and growing much faster than them globally. I wish them well, but they are in much worse financial condition than GM now. These facts may change, but not without some reason other than your emotionalism
      wrt-Toyota: You are right that their recalls have harmed them, but they, as well as Honda are both losing share in the U.S. Setting aside the nearly 2,000,000 advantage they have in their home market, GM is actually millions ahead of them in the rest of the world. Nice try, but not factually sound. Besides, to put their recall situation on a par with the far greater disaster that GM suffered being forced into bankruptcy is just silly!

      Finally- GM is not encumbered to the government in any way other than their ownership of around 30% of the stock. Not one more dime is due to the government from GM’s operations. All remaining “payback” to the government will come from sale of their remaining stake. Can’t you understand that?  They went bankrupt, the Government took them over in exchange for the money invested to fund their bankruptcy. The return will come from investors who freely choose to buy the stock. Please try to understand this. It is a great thing that they generated good profit sharing and that they are getting back to running the business in the best way possible. It will be better yet when the Government sells their remaining stake.

    • 0 avatar

      in 1992 G Richard Wagoner was promoted to Chief Financial Officer of the General Motors Corporation at age 39. he leap frogged other executives with many more years seniority and vastly greater knowledge and experience, this was done in spite of the fact that Wagoner did not possess even an accounting degree. (and we wonder how our financials became so distraught?) the reason for this promotion would not become clear to me for almost 15 years.

      over the years Wagoner was promoted time and again in spite of repeated failures, as head of Purchasing, Chief of North American Operations, and as CEO. Red Ink Rick was clearly the ordained sinister minister, groomed for the task of dismantling GM. he purposely and methodically sold off assets that the corporation had accumulated and developed over decades. the capital was siphoned off to the banks who populated and controlled the Board of Bystanders. they bled the cash thru many fees including “Investment Advice” not to buy Nissan and Chrysler. billions more were shuffled to Merrill Lynch thru the Fiat Fiasco. meanwhile the Delphi Debacle was the practice round for the eventual rinse of GM’s carcass so it could then be handed back over to the very same banksters who drained it.

      a beautifully thought out and masterfully implemented scheme. too bad it is illegal.

      side note to Doc. I said Ford would over take GM in the USA, not globally. hard to measure up against a company that owns 50% but counts all of the units sold.

  • avatar
    doctor olds

    Motorhead10- I’ve been busy with Buickman. I would like to address your points now.

    By “popular media” I mean ABC, NBC, CBS, CNN, MSNBC & Fox. They present many uninformed, politically skewed and flatly inaccurate  statements. Wards is a respected auto industry journal. I did not see it as popular media, sorry if you do. I typically refer to their published industy sales data, and in this one case, their interview with the General Manager of Buick-GMC.
    Yes, the financial crisis collapsed GM, Chrysler and very nearly Ford, but for their $23B credit line locked up before the collapse and credit freeze. It dragged Toyota to huge losses, actually greater than GM’s loss in Q1 of ’09. Look it up, if you don’t believe me. That is an example of facts ignored by popular media. The stage was certainly set by the financial drain of years of unsustainable entitlements and labor costs, harmful government policy and yes, plenty of managment blame, too. Toyota had deep enough pockets to get through, although the Japanese government did help them in a much less adversarial, contentious and public way than here.

    I did not detail the reasons for GM’s 2010 profit. The debt shed in bankruptcy certainly helped a lot. The other important reasons are: new products are selling well while enjoying much higher profit margins, the full benefit of the 2007 UAW contract were realized in 2010. The small recovery in industry sales helped, too.
     
    I agree that it is not reliable to predict long term stock price growth based on only 88 days since the IPO. It has gone up, and appeared on a fairly steady uptrend until an unexplained drop on Jan 29. I’ll bet it will start moving back up when year end results are reported soon, but no one has a crystal ball.

    I meant to type “mechanical engineer”. I realize others have knowledge of the business, but remain confident that my ideas are considered and based on real data and experience inside the company rivaled by very few, particularly on these forums. “I am always right, and I never lie.” to quote Firesign Theater, tongue in cheek and to get a rise out ouf you. I can say that because when the facts change, my opinion changes to match the facts.

    You bet I saw Oldsmobile’s demise coming! Like the sick feeling I had in my gut when I heard the news that Saddam Hussein had invaded Kuwait. I new it would lead to bad things. I had a similar feeling when I learned that the GM reorganization of 1984 would result in the engineering and manufacturing responsibility for Oldsmobile’s most successful models, 88, 98 and Cutlass Supreme and Ciera moving from Lansing to Flint (Buick) and Warren(Chevy). Lansing consolidated the responsibility for Small cars which Olds had never done well with.
    I knew the Oldsmobile machine that had enjoyed unparalleled success was going to be destroyed. Olds had done a great job of providing people the cars they wanted to buy, and most importantly, with high quality and quick response to field problems. My premonition was right. Olds still sold a million a year thru 1986, but then the effects of the new organization precipitated their long down hill slide. I blame CAFE for the radical design changes that led to quality problems and a wholesale rejection of the new, much smaller 88, 98 and Toronado. We fumbled the execution, largely due to the slicing and dicing of the organization, and management made a poor decision to kill Olds. At the same time, the downsized cars we had to sell to meet CAFE did not appeal to our traditional customers. It is a fact that truck sales which had averaged around 15% of the market for decades started to grow at the same time, eventually peaking at nearly 60% in 2004. Customers wanted big vehicles. Their only choices were trucks and SUVs. 
    I am not defending all GM managment or all their decisions. Bluntly put, I despise some of them!
    They made plenty of mistakes. At the same time, the whole industry was pinched between a monopolist unions power to impose unsustainable costs, CAFE standards that uniquely harmed the Amercan makers with  separate import and domestic tracking requirement and global competition from low cost producers without the burden of retiree health care that once cost over $1,400 a car.

  • avatar
    doctor olds

    Buickman, at the risk of offending your supporters, I repeat- You are living in fantasy land!
    You presume to be so knowledgable about Wagoner’s career, yet again your ignorance is transparent. Either that, or you are purposely lying! Which is it?

    In 30 seconds, I, and anyone else could verify that Wagoner holds a BS in Economics from Duke, and an MBA from Harvard! Sounds like a pretty smart cookie to me, and supports my personal, much more direct knowledge and opinion of the man than you have.

    Your Distortions and lies are actually quite disgusting! I am appalled to see other commenters supporting you, and your crazy notions. Look this up for yourselves! Wagoner’s credentials are published on Wikipedia. Buickman is just making it up! 
    I suppose the Illuminati planted false information and the Journalists of the world are also in on the conspiracy, too!

    You are nuts, with a sad, ugly spin!

     

  • avatar

    “Mr. Wagoner, if your pitcher is getting bombed in the fifth inning, you look to the bullpen. it’s time for you to hit the showers sir. I am here today to ask for your resignation, please.” I diagnosed the problem, it took Rattner to pull the plug. he makes millions and I get called crazy.

    said no accounting degree, you have some of your 30 seconds left.

    what’s nuts is doing the same thing and expecting different results. look at GM’s Decades of Decline loss in US market share (previously referred to as domestic). it’s a descending flight of stairs. one might hypothesize that stupidity is not sequential. really nuts is thinking people will just accept what you tell them.

  • avatar
    PeteMoran

    @ doctor olds
     
    I’m pleased to support buickman and his valued constructive critique of GM.
     
    If you are intent on re-fighting the predictable demise of  “old” GM and what appears to be the predictable path of “new” GM, perhaps you should first avail yourself of the writing on this site going back easily 4, perhaps 5 years.
     
    (Fell free to question my heritage, qualifications, experience, sanity etc).

  • avatar
    Natasha

    My, my… that is quite the heated debate.  Don’t throw anything, but what does it matter Wagoner’s education… he got the boot, didn’t he?  Wasn’t he asked to leave because he was completely ineffective?  How important is Wagoner now?  I don’t see it.  How about Fritz?  Is he doing any better?

    • 0 avatar

      well Natasha, no longer GM CEO, Fritz’s spirit still spins on Axis. so in answer to your inquisitive, he is likely better off.

    • 0 avatar
      doctor olds

      Why should I question you? You did not attack me personally as did your pal, nor did not bring up the Illuminati. Defending presumptous, yet ignorant Buickman does not help your image, however.

    • 0 avatar
      doctor olds

      Wagoner got the boot because Obama had to make him the fall guy. They needed red meat.

      The GM Board of Directors liked him. And it certainly can’t be argued that they have less information on his performance than anyone here. They thought he was playing the hand he was dealt as well as anyone. 

      Watch out for Buickman- he thinks it was all part of an insidious plan! 

    • 0 avatar
      Acc azda atch

      OLDS:
       
      YOU are living a fantasy. It doesn’t MATTER what the Board of Directors thought. He was a failure way before they went into bankruptcy. He was a failure.. for quite some time. Ya don’t drop the share value of the company ya helm and still have ya job.
       
      If ya seen any movie incarnation about TITANIC or have any clue as to what went on that night..
      Ya should know the basics…

      Bruce Ismay who represents the financier of the of the boat.. gets off in a boat and essentially ROTS in a cold place in hell after that night and dies in seclusion.
      Captain loses his mind and goes down with the boat.
      Architect Thomas Andrews… did the best he could… and is seen staring at the “New World” painting.

      Wagoner should have paid DEARLY for the issues and troubles he brought onto the company.
      He should have gotten the boot much sooner. Heck, the directors should have gotten the boot much sooner also!
       
      As BUICKMAN says..
      As much as I hate on Pontiac.. look what they dealt with. They needed better cars, they needed better marketing. They didn’t need to be competitive against SS from CHEVY and PONTIAC should not have had copies.. from SATURN!
      Read up on how they effed up PONTIAC. http://www.geetotiger.com/Killed.htm
      Ya preaching ya crap to people who don’t know any better.

  • avatar
    tedward

    I guess I’m less of an industry buff and more of a car guy, but what’s really offended me about GM (and Ford, sometimes even more so) in my lifetime has been their awful cars. Now that this is changing I’m a lot less interested in lynching a departed exec. team than figuring out what happens next, and in figuring out where they went wrong and seeing if it applies to other companies.
     
    All the same, have at it, when I feel strongly about a topic I want to have it out also. The rest of us probably stand to learn something watching this debate, even if it it starting to skew towards a “mine is bigger than yours” argument.

    • 0 avatar
      doctor olds

      teward- I’m with you! I got into the business because of love cars, particularly performance cars. I got my nickname as a student at General Motors Institute because of my enthusiasm for my Division’s 442. (Google Oldsmobile W43 to see what might have been.)

      I was painfully aware of just how tarnished the GM Mark of Excellence became over the years and worked with a lot of talented, hard working people who were trying fix that. Evidence is growing that they are succeeding. Believe me, the decline and death of Olds and then my adopted Pontiac has been simply devastating. Have you driven a G8? What a pity it is gone.
      I rented a Holden Commodore SV6 with the updated DI V6 in Australia last fall. It is a wonderful driving car and, to my eye, very good looking. One can only hope a version of this car will be released by Chevrolet to fill the void. One thing is sure, they have some great cars now, and in the pipeline.

      To put it bluntly (and figuratively!) I know where the bodies are buried. I was privy to quality data that lets me know where GM was and where they are now. I know many of the product development people up to the Vice Presidents and I understand the processes and systems that have been put in place to improve results.

      I don’t claim to have Buickman’s sales ability, or want to attack him. He introduced the demeaning insults. My intent is to correct factual errors, express a deeply considered opinion and I do it because I am a GM fan, despite all the reasons I could be bitter.

      I ask you to disregard all the political psycho-babble, the raves of disgruntled GM or Dealer employees and books written about GM decades ago. It is a new day and a new company. 
      Judge GM based on honest review of facts, by the products they are putting out now and their business perfomance today.

  • avatar
    tedward

    but…I still don’t see how a $219 month lease on the Cruze is indicative of bottom rung price performance.

  • avatar
    doctor olds

    To believe Buickman’s narrative about GM, one has to believe there are evil, secret behind the scenes deals and schemes that no one but he knows about, including all the investigative journalists who would love to get some dirt on GM! He surely does not have any special knowledge of these things, only a strange and twisted opinion founded on emotion and, apparently, opinions about the character and personality of people he has never met.

    What I write now is all a matter of public record, not wild eyed conjecture.
    GM, along with Ford and Chrysler all have had years of losses.
    The reasons are simple and transparent. Their costs of doing business have exceeded their revenues, plain and simple. Their quarterly and annual reports are available to all to confirm for themselves.
    The UAW monopoly on the Americans, Government polices that uniquely burdened and damaged only the Americans and Global competition have all come into play.

    I reject the notion that all American business leaders are inept, or that GM has had a monopoly on bad leadership. It is nonsensical and not borne out by the facts.

    Wrt-Ford. They suffer a $1,000 a car interest cost disadvantage compared to GM with their much weaker balance sheet. As an American, I hope they continue to do well, but sales numbers seem to be showing their time as the darling for “not taking a bailout” is fading.
    They lost share in January- down to 15.3% from 15.9%, while GM grew from 20.9% to 21.9%.
    January may be an anomoly, but with GMs great balance sheet and much lower structural costs, the aggressive pricing which is the subject of this article, is much easier for GM than for Ford. The old days of pushing the iron out to cover GM’s immense structural costs are over. They can undercut Ford by a grand, and still make money. Their advantage in the cost of trucks is even better with engines that cost them $500-$600 less to manufacture.
    Time will tell who is right, It may be somewhere between. It is documented fact that the fundamentals at GM are strong and improving, their products are well received: Equinox sales have been capacity constrained, Camaro, with no convertible handily outsold Mustang for the first time in may years and profitable Buick and Cadillac sales are up in the 40% range.
    Get over you old preconceptions and let the data tell you the story. At least open you mind to reality. 

    • 0 avatar

      uh…I’ve met them.

      secret dealings by banks?

      “I’m shocked to find there’s gambling going on here!”
      Claude Rains as Captain Renault in “Casablanca” 1942

      realize it’s my love of GM that drives me, a rather tough love at times…

      see The Adventures of Buickman at http://www.GeneralWatch.com

      click “like” on “The Buickman” FaceBook page.

    • 0 avatar
      Acc azda atch

      Doctor olds,
       
      I’m not an expert on GM..
      Not nearly as close to GM as Buickman is. I don’t have any of the qualifications as he does or any of the hands on in the trenches info as you do.

      However,
      I follow the car industry also, who buys whom, the numbers each month and the track record of EACH said company as a statement of who they are and how they are run. On top of what is on the market now.. and the lies and deceit in marketing they are accomplishing (Lambdas compete with GMT900s. Thetas.. are MIDSIZED, not compact.. with nothing being sold under them).

      I have followed Buickman and others like him (Peter Delorenzo to name a few) for a LONG time, and as wild eyed and or as crazy as they seem.. they tell the truth.
       
      GM doesn’t learn.
      GM is being helmed by a guy.. who really doesn’t know the industry at all. He came from the NEXTEL, that doesn’t make ANYTHING. Its a logistical company.. at best. They could have at least found SOMEONE in MANUFACTURING to run the damn place. Now hes over at GM (a producing company and making waves there.. the likes that we won’t see for at least 5yrs.) We know those who came before him… didn’t have a manufacturing degree.. just the usual MBA that somehow tells you, you know what’s best for a AUTO COMPANY. Go figure THAT one out!
       
      But enough of the beating down on the CEO’s.
      Buickman has repeatedly mentioned that the marketing is always off base and if ya had a few good products, they’d almost sell themselves. (Witness Honda cars RIGHT now.. taking pot shots from everyone, (because of their styling, their overlap, their lack of efficiency or high tech motors) now that their cars are neither lightweight OR fun to drive, forget the corporate struggles going on right now, while the cars live off of a halo of perfection from years gone by.) If the cars cant sell themselves.. than price is all ya got — witness GM’s firesales. Would you buy a car from anyone.. if price is all ya got?! (Witness how successful GM firesales ARE.. a cheap car for those who don’t know a #)@*@*.) Drops the resale like a rock when ya got 3-5g on the hood.
       
      YOUR Preconceptions tells you.. that these things wont happen again.
      That GM can sell their cars based on the vehicle merits ALONE… which is why they are going back into high risk customers (forget the debate about Honda doing it.) GM is again producing a sedan in the same mold as the Cobalier, made in the same factory (Lordstown) without anything that makes it class leading (leaving the hatch to Europe and Australia). They could have made a hatch standard for every model in every country. They could have made a SS model. They could have advertised the quality. They could have started with the LTZ version WITH CRUISE CONTROL, standard on the most stripper of TRIMS!!!!!! They didn’t, why (??!!) because they just want ANOTHER mediocre car that people will buy for the heck of it. If ya like riding a bicycle.. try a DAEWOO MATIZ (Sonic / AVEO). It doesn’t matter about the sales numbers on the CRUZE ever. The car that came before it.. was such a damn loser for most of its 30yr life, taking it out to get shot.. IS DOING IT A SERVICE! The CRUZE doesn’t offer anything that’s class leading. (Forget stabilitrak or the onstar b.s or the 10airbags. Shoving crap like that in it and putting it on SUPERBOWL SUNDAY with a ad about facebook through ONSTAR doesn’t make a quality vehicle. It makes a GIMMICK! Make the DAMN vehicle with a 2ltr turbo STANDARD and a hatch as the only standard equipment. Sell the damn car as a new/fun car, that’s inexpensive under 18FLAT with a hatch for versatility and you’ve got something that can whip the ass of the CIVIC.. and MIGHT have a chance against FOCUS for 2012 in the HATCH.

      As for the other old standby..
      Buying AMERICAN is a crock of crap. I don’t support the theory because ya don’t buy BLIND. Buying American isn’t just where the company is based.. but where the cars are built. Do ya want a Canadian CAMARO or a Mexican last gen FOCUS? Maybe its the absolute aggravation and god damn hatred I have for GM as a company and how POORLY its run, but I ABSOLUTELY agree with BUICKMAN. This ZEBRA we call GM.. doesn’t change its stripes overnight or through bankruptcy. (No matter how WE paid the lawyers.) Remember.. its been heard that DAN the MAN Akerson wants(ed) 10g of cost REMOVED from VOLT.. on top of doesn’t get it why the cars cant be rebadged versions of themselves.. (sound familiar to you?) Makes ya feel good about GM, hmm?
       
      Olds,
      Ya need to stop trying to KID yourself. Stop trying to kid anyone in here.. who knows a damn. Ya need to take ya rose colored glasses off ya head and see whats in front of you. Put the binoculars on and pretend you see that iceberg coming up fast at about 1/2mi away.. and pretend you can see / get this boat to turn…
       
      Ignoring it.. is just plain dumb.

  • avatar
    Bridge2farr

    Buickman=bitter,disgruntled. Maybe a little “off”.

  • avatar
    wmba

    @ doctor olds:

    Your original post is quite amazingly self-serving. The follow-ups only attempt to shut the rest of us up by your “superior” knowledge. I can only assume that you haven’t read the GM Death Watch series on this site, nor the subsequent articles by the current editor, because you repeat the usual pap that GM boosters were handing out from 2005 to 2009, most of it generated by the genuine disbelief that a major US corporation could be so badly led by utter and complete drips, and their fervent hope that it just couldn’t be true. Ah, but it was.

    Wagoner was a total dud from day one at GM and presided over the loss of $70 billion of GM stock value during his tenure. He then lead GM into bankruptcy. You say you were working at GM during this time — were you totally oblivious to what was going on around you? Wagoner had GM almost turned around, you say? In exactly what universe would that be? Is bankruptcy a turnaround? Where did the $70 billion go exactly? It was on losses suffered by people and companies on their “blue chip” GM stock and creditors stiffed by the forced bankruptcy.

    You repeat the untruth that GM has paid back its loan money since bankruptcy. Big Ed merely gave back some of the “operating money” that he didn’t have to or want to use. The money paid back wasn’t earned income. The current TTAC editor had an article printed in the NY Times pointing out the fallacy of the argument that GM had repaid its debt. It is available for you to read on this very site. In fact, before boasting about what you “know’, you would be wise to do some background reading to enlighten yourself a bit about the actual facts. Not what you think are the facts and have managed to rationalize internally.

    This site often gets people parachuting themselves into the comments section, gaily avoiding the labor of reading the background material available right here, and making bold pronouncements of the “truth”. In your case, you also mention you are a mechanical engine (sic), as if that meant you are better than the rest of us and better informed because you actually worked at GM. What you are attempting to put forward as fact is to me pure revisionism, a rewriting of history.

    I’m also a mechanical engineer, so what…

    The point of this site is to attempt to get at the truth. There are many posters here who have been around for five or six years and who are obviously well-educated. There have been about 200 articles on GM in that time. Yet you arrive out of the blue with a load of propaganda and no real idea of what happened and presume to lecture the crew here on this GM matter. Fail. You are simply under-educated on the matter, in my opinion.

    As for your criticism of Buickman, sorry, you have it all wrong. He’s a busy man running his car dealership and has been the biggest GM booster out there. His central theme has always been that GM hasn’t a clue how to market vehicles, and he offered to help the company with it years ago. I believe he has personally sold over 17,000 new GM cars himself. His criticisms of the aloof, out-of-touch GM marketing campaigns is valid stuff. Belittling him is pretty rich, particularly since flogging those underachieving cars kept you employed and free to criticize the car salesman as a species not worthy of respect. Buickman is hardly your average corner lot used car salesman.

    Meanwhile, GM once again has a loose cannon running round the Ren Cen, issuing orders to the minions. Akerson is yet another in a long line of twits who know nothing about the car industry but who think it’s the same as selling cornflakes or toothpaste. He even presumes to be the man okaying new car designs. Read the autoextremist.com to find out what a pure treasure that man is.

    I’m annoyed as hell about GM. It’s my tax money running that outfit still, and the zero debt you go on about is a merely a technical result of bankruptcy. Thousands of people with old GM stock got ruined by the rundown of the stock to zero value prior to bankruptcy, and yet we are all supposed to go into spasms of delight by your cherry-picking some small positive aspects of their shaky comeback, and ridiculous criticism of Ford. The point of this article is to show that GM is behaving no differently now than it did prior to bankruptcy. Stockpile cars, then not knowing what the hell else to do with the pile, sell ‘em off cheap.

    GM will succeed when, and only when, it makes products people want to buy (i.e. something decent beyond Camaros and Silverados and warmed over Korean cars), and when it doesn’t have to discount the vehicles like groceries beyond their sell-by-date. As other posters have said, that means either raising the quality of materials to meet the fatuous “retail” price, or getting serious and setting prices properly at fair market value in the first place. Not by seeking subprime customers on whom to drape the monthly torment of a car payment.

    Engineering a vehicle is one thing. Producing a vehicle is another. Selling the damn thing is the final step. GM has proven they don’t have a decent handle on how to efficiently perform the last task. If they did, maybe your glorious prognostications would come true eventually — the man on the street could care less how well the factories are run, frankly. He gets to try to puzzle out the crazy patchwork quilt of sales and marketing campaigns that twits at GM have come up with, repeating all the old errors of pre-bankrupt GM. That is what Buickman is mad about — idiotic marketing programs, and it’s a side of the business, where the rubber actually meets the road, that you show a marked disdain for and no practical knowledge at all from the look of it, despite eight tortuous years on the road calling on dealers. I bet you hated it.

    • 0 avatar

      rather well said my friend.

      jd

    • 0 avatar
      doctor olds

      He is a little to lost in old movies, too. Should be tell him they are not real?

    • 0 avatar
      doctor olds

      wmba- Jeez, another one. I am tired of typing, but I don’t mind you ganging up on my since I have the facts on my side. 
      Your surmise is correct, I haven’t been here in  long time! On the other hand, your logic that info presented on this blog invalidates a 40 year career with may varied experiences and direct involvement in GM’s business and decision making as well as the wealth of information available to anyone with a PC is quite surprising.

      I don’t know how long you have been paying attention, but I can assure you I did not just fall out of a tree. I have written of changes that took place beginning in the 70’s and 80’s. I have been paying close attention since then. Where were you? This blog did not even exist for most of that time.
      I did not list my education and experience to lord over anyone, but I am not shy in asserting their value.  I am an arrogant SOB who tends to inspire backlash. I earn the right by working to get facts and data. I am also glad to be proven wrong so that I can learn. My desire is to understand reality. GM paid me a lot of money to do just that.

      I would like to to make special note that Buickman initiated the personal attacks, not the other way round. He presented crazy notions about Illuminati and secret bank sellouts. I have not written one word about the quality of GM’s marketing or sales staff, nor have i attacked his knowledge of selling. I do wonder why you think that selling a lot of cars isa qualifier to be expert on a business he has never even worked in. Believe me, Dealers are not General Motors and have very little inside knowledge.

      I defend my credentials to have and express my opinions, and, far more importantly, I present facts to back them up.

      Not one of my facts has been refuted. I am sincerely interested in learning, correct me with facts! Opinions don’t cut it. Nor does a vague reference to the NY times! I don’t think they are the go-to guys for much of anything, especially the car business. Did they even come to Detroit to develop their story. We are usually considered flyover country to them. 

      You are right.  I have not been reading your blog, and frankly, don’t have much respect for the lack of facts presented to support so many opinions in my brief awarenes. If this site is really about the truth, get some facts!

      Here are some questions- it may help your understanding, or mine. Enlighten me with facts and logic so I can learn:
      If GM does not build cars people want-
      Why are they selling many more cars with 4 nameplates than they did with 8 last year?
      Why are they the number one seller in the the U.S. and China, thetwo largest markets in the world?
      Why did they outsell Ford by over 300,000 units in 2010?
      Why did they tie Toyota for global sales leadership in 2010?
      – Do you really think their recall problems limited to the U.S. were more disastrous to their global sales than GM’s bankruptcy and all the hateful opinons about it, especially considering GM’s much larger exposure here?
      Why did their lead over Ford grow to 30% in January?

      If GM has not repaid every dime due to government from company operations-
      Precisely how much do they owe? (I think the factual answer is 0. Prove me wrong.)
      – Does it really matter that they used part of the operating capital injected into the business as part of the bankruptcy restructuring? (don’t get emotional on this one!)
      – Doesn’t it at least imply they were generating enough cash flow to afford to let that money go?

      Laying all blame for GM’s problems on stupid management may appeal to your emotions, but it is just not accurate. If it is,
      Why did Ford and Chrysler find themselve in the same boat?
      Why did they also lose billions of dollars over the years leading up to the GFC?

      Whether you accept this or not, the fact is the board of Directors liked Wagoner as the best man for the job. You can go find that information yourself, if you won’t take my word for it. They thought he was playing the hand he was dealt as well as anyone could.
      It was their professional responsibility to evaluate him and they have far more credibility than any blogger or car salesman.

      It pleases me to be able to agree with you re: Akerman. I know Tom Stephens and had an office a few feet from his when he ran GM Powertrain. I was elated when he replaced Lutz. I am scared to death that Akerman, for the very reasons Buickman cites,  will destroy the most important aspect of the business, product development. I may be whistling by the graveyard to hope Stephens will still have a powerful voice in product development.
      A good salesman may be able to sell almost anything. Most of them are not that good though, and it is a hell of a lot easier to sell a great product than a lousy one. 

      I came to this blog to read the article and comments. I have made no comments specifically about the article. I have presented considered and thoughtful opinion with facts to support them in hopes of enlightening folks as to real truth.

      It really does not matter how any of us feel about Wagoner, of even how GM fell.
      It does matter that misinformation is so wide spread.
      Boiling it down to brass tacks.
      These are facts about GM today:
      -GM is selling far more cars than anyone else, everywhere in the world except closed market Japan and, at least in January, their advantage over second place Ford improved a lot.
      -GM reported $2.1Billion in profit in the North American Region in Q3 and world wide profit of over $4B in the first 9 months of 2010.
      – Record profit sharing checks announced in the last day or two are the highest ever. Since they are based on profit, the year end results must be pretty good.
      – GM has much lower structural costs than pre-bankruptcy, like it or not.
      – GM has much lower debt than Ford, like it or not.
      – GM has $45B in carry forward tax credits, like or not. This allows them to invest more of that profit in the business to eliminate all debt and shore up their balance sheet.
      -GM has been winning critical acclaim- Volt is at least two enthusiast magazines car of the year and is sold out for months to come.
      -GM has matched and surpassed Lexus with Buick’s long term dependability according to JD Power.
      -GM’s plant utilization in America, around 80%, surpasses Ford and is almost up to leader Toyota.

      I understand the emotions expressed here, and would love to see just one of my list refuted with facts, not emotion based opinion.

      My bottom line opinion- New GM is strong and can easily afford aggressive pricing to meet the competition.  

    • 0 avatar
      1996MEdition

      “My bottom line opinion- New GM is strong and can easily afford aggressive pricing to meet the competition.”
      Aggressive Pricing?  How about just building a well engineered car, at benchmark quality levels, and at competitive price to begin with?  The former has never really been an issue for me with GM.  The latter two I have had personal, negative experience with…..enough to drive me away as a customer (BTW – former GM employee from a GM family, current GM supplier employee).

    • 0 avatar
      doctor olds

      @1996Medtion- Great Idea! Google JD Power long term dependability study. Independent data on GM quality has been quite good for a number of years, now. And this article is misleading you. GM is merely stepping up to the competition. My competitive comparisons, using Brand websites shows that GM base prices are competitive.

    • 0 avatar
      1996MEdition

      It’s just like having Christy Garwood back at TTAC!
       
      I can look up prices on the internet.  I can’t look up quality.  That is something that must be experienced.  Obviously, JD Power never sent a survey to me.  Fool me once, shame on you.  Fool me five more times, shame on me.  GM did not value me as a customer, plain and simple.  That is my personal experience.

  • avatar
    mikey

     Wait just a moment. Yeah…I’d be one of those people that have been around here for five or six years. I’ve read thousands of postings spewing GM hate and venom. We have posters here that drip hate with every key stroke.

    We all know who they are. I read thier “garbage”…consider the source,and move on.

    Now along comes dr olds and makes some pretty good arguments. What do we do? We beat him up, then he defends his position. Then we beat him up some more. Sooner or later,dr olds will get pi$$ed off and move on. Any body remember ..Phil Ressler?

    Speaking as one that lives on a GM pension,I find dr olds a refreshing voice around here.
    .

    • 0 avatar
      doctor olds

      Thanks for the support!
      Now I remember encountering this GM Death Watch quite some time ago.

      I just retired in mid-October 2008, the beneficiary of a sweetened pot to entice older workers to voluntarily retire in the force reduction which was part of the plan to add $15B in liquidity to GM operations in response to the $4 gas spike.
      As kind of a last hurrah, I visited my old friend who was the Plant Manager for all GM’s Car Assembly and Stamping Plants in Lansing in the third week of October. I could tell he was distracted. Then he told me the Senior Management conference call that morning had informed him that car sales had just about stopped completely due to the Global Financial Crisis.
      I understand the immense fixed costs in the business that do not stop with sales declines. It was not long before GM had burned through the entire $15B and was on the brink of ceasing to be a “going concern”. Those of us in the know, have been intensely and painfully aware of what followed.

      I had just bought 1,000 shares of GM, sure it would not go lower than $10. It was terrifying to watch events unfold, to read ignorant, hateful opinions that “we should let them die”. My 401k plummeted along with the rest of the stock market. I bailed on the GM stock a few days later when it hit $1.64! Fidelity even had a snafu that resulted in my first pension check being late. I called and they told me my November 1 check should be available by December 20! 

      I remember thinking, 40 years, I finally retire, and I am not even going to get a pension!

      My emotions were just too raw to suffer hateful fools, particularly those with no qualifications for their presumptuous representations that they had inside understanding of the Truth.

      Most of the hatemongers don’t have any skin in the game. There comments are really emotional excercises  that mean very little to their lives. To some of us, this is very, very personal.

  • avatar
    oboylepr

    Speaking as one that lives on a GM pension,I find dr olds a refreshing voice around here.
    Yeah Mikey, because he says what your itching ears want to hear even if it is patent nonsense. It is far from the truth. Buickman’s track record speaks for itself. Here is a guy who is/was GM’s biggest fan and very well connected to what is actually going on inside the company. If he seems to have soured a little on GM, well there are very good reasons for it. TTAC’s GMDW series and GeneralWatch.com both document it well enough. You dismiss what you call ‘GM Haters’ because they say what you don’t like to hear and it is very clear that dr. Olds is cut from the same piece of cloth.

    • 0 avatar
      mikey

      @dr olds….I hear ya ……I was a lot lower than you, on the totem pole. 36.4 years punching the clock. Like you I didn’t expect the pension to last after I retired in late 2008. I cobbled together a financial plan so I could survive the collapse of the GM pension plan. Every day I thank my lucky stars I didn’t have to impliment my plan.

       IMHO… I believe that GM has a long ways to go.That being said, I think they have the right plan, and the right people, and for sure the right product, to last another hundred years or so.

      @oboylepr….cut from the same cloth, you say. Well thats the attitude one gets after spending your life inside GM. Contract supervisers, that couldn’t hack it, might not see things the same way.

       

  • avatar
    doctor olds

    oboylepr- And just what is your claim to fame?

    You guys have been practicing this mutual masturbation thing for so long, you don’t recognize the truth when you read it.

    Buickman started right out with personal attacks and self congratulation, “The best salesman in the history of the world!” “I forgot more than you will ever know.”

    He is just a car salesman, one of many thousands. He has no inside track.
    Why do you put so much stock in what he says. You can be sure, if he was as successful as he claims, he would not be so ill informed and presumptously egotistical.

    I think you are the pot calling the kettle black in your criticism of mikey. At least he knows GM from the inside, unlike you and your beloved hero.

    And just what is your claim to fame?
    Are you just another guy that drives a car and is pissed off about paying for a repair, therefore becoming an expert on the industry. Is that your qualification to know Buickman is so brilliant in his analysis?

  • avatar
    doctor olds

    @mikey- I was not high on the totem pole, just a Senior Engineer, but I had jobs that required me to regularly call meetings to present issues and analysis to VP’s and Executive VP’s. I also have had a passion for the business for well over my 40 years with GM. 

    I agree with your idea that GM has a long way to go. There is plenty of room for improvement. There is also plenty of blame to go around.

    I never mean to say that they have been or are perfect. Far from it. I have met and worked for my share of a-holes and seen more than one dysfunctional thing happen. They made horrendous mistakes. I once had the daunting assignment from the Council of Engineering Vice Presidents to determine why we had recalls and what to do to stop them.
    Believe me, I know more than most that there are no easy answers.

    What I find particularly irritating is the presumption of so many who have never had any responsibility to actually run the business. Sideline chatterers, I call them. They spout presumptuous ideas that are so obviously wrong, it is maddening to behold.

    • 0 avatar

      doctor olds: Perhaps you should consider getting your own blog if you don’t like this one. If you do want to engage in the discussion here at TTAC, you need to stop attacking commenters. Feel free to share your perspective, but dismissing every dissenting opinion as “sideline chatter” is not how the game is played around here. Further attacks on commenters will earn you the banhammer.
      With that, I’m closing comments for this thread. This “debate” isn’t going anywhere at this point, and it’s getting nasty. Don’t worry though… I’m sure there will be plenty of opportunities to discuss GM in the future.

Read all comments

Recent Comments

  • Inside Looking Out: “I’m ashamed at the way this world has become ” Don’t worry, all that house of...
  • ajla: I think space and being largely left alone (from both the mayor and dirt bike gangs) are worth having Red...
  • ravenuer: spppp, You’re missing the point. Young men riding legal motorcycles are not the problem. It’s...
  • SPPPP: @Lou_BC – Well, it’s a good question. The “enforcement push” seems like a version of...
  • Imagefont: I’ve visited Manhattan many, many times for work and the place, as awesome as it is for its history and...

New Car Research

Get a Free Dealer Quote

Who We Are

  • Adam Tonge
  • Bozi Tatarevic
  • Corey Lewis
  • Mark Baruth
  • Ronnie Schreiber