Quote:
Originally Posted by mgescuro
This is interesting, and the PDF raises a couple of questions:
Slide 5.
If GM notes that sales are dropping, why isn't GM capable of tweaking factory capacity in order to adjust for the drop in sales? Does GM have that capability? If GM's factories were flexible and their platforms were more interchangeable, GM would be able to shift product of more popular cars to utilize idled factories. What we see from GM is a continued rise in inventory, or a complete shut down of the plant with layoffs. This is a glaring operational issue. The advantage of this would be to reduce the effects of the cyclical market.
I would like to see this same graph with amount of inventory over the same period.
Slide 8
Interesting slide. Doesn't take into account the possibility of a white knight.
Slide 10
Since when has GM "planned conservatively?"
Sorry, but when I saw GM's projections, to me it looked "aggressively high."
Slide 12
2010 Cruze? Why the staggered launch, I wonder.
Once again, they focus on their 3 good cars. What about the rest of the GM lineup?? Dammit!!
The 3rd bullet point: If GM was teh leader in biofuels, great. Why isn't the BioPower lineup in the US? Saab is known for efficiency, innovation, and fuel efficiency. Yet, the most advanced Biofuel engine isn't even in the US!!!
Now, what none of these slides goes over is the fundamental business and product strategy at GM. GM sells all these biofuel cars, but they're cars that no one wants to buy. Where are the diesels? Where is the CTS biofuel? Why are only 3 cars mentioned when pointing to improvements? Is GM embarrassed by Solstice/Sky? Corvette? The Lambdas? 6 hybrids? Mostly trucks. Why no Cobalt Hybrid? Why no Astra hybrid? Why no HHR hybrid?
For every good point GM has, there are 5 bad points.
And that is why GM is in just deep trouble Their strategy is inconsistent. And no one believes them when they do something. There is no consumer trust. And GM's reputation is trash. No money is spent on image and PR. There's no way GM can survive without it.
GOod luck GM. You'll need it.
I remain torn whether GM is deserving of the bailout. I'm 50-50. I don't want to fund bad business strategies. I dont want to fund companies that just don't know how to conduct business. I don't believe they understand the market anymore and are operating on decades old impressions of the market. But I also realize the severe impact of the economy without the Big 3. Plus it really is an issue of national security, if the US doesn't have a manufacturing base of scale.
What to do???
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To respond to some of the comments you put up
Slide 5:
This shows not only GM sales, but for the entire US market. This includes Toyota, Honda, Ford,... sales as well as GM's. This is an attempt to show that the market is very weak, which at its lowest point is down 40% from last year. To do what you are suggesting would cost millions and in some cases billions of dollars to reconfigure plants. To shut down or cut shifts is a much more efficient way to play with production numbers.
Slide 10:
In this case that bullet is directly related to the amount of projected sales, not so much focusing on the financial implications of the company.
Slide 12:
The point of the staggered launch is the continued work on the Cruze's power train. The power train, arguably the most technology riddled internal combustion engine shows GM's initiatives to improving its fuel economy. The goal of mentioning both the Volt and Cruze is show a forward thinking in relation to the future of CAFE and better environmental foot prints.
The rest of GM's upcoming portfolio whether good or bad does not merit to be mentioned as to most people they are "just another car". This isn't to show the focus on these vehicles but when you are approaching potential investors, you must show determination to providing something fantastic and giving them something to look forward to. In this case fuel economy is what is important, if GM was too far behind in attaining CAFE there would be no reason to provide funding. The reason to mention 2-3 vehicles is to highlight some strong aspects of the company, not to downplay the other vehicles. As it points out 14 of the next 15 vehicles will be cars, some of which I am even shocked to see as a GM.
Sounds as if you may have some more feedback to give, in that case I would love to hear it. The market is difficult to understand, not only for GM but all automakers at this point.