Gentlemen, Start your Turnaround!

[agman25]

GM has accomplished a lot in the 2005-2007 timeframe. A lot of us who follow GM on a daily basis seem to lose focus on the big picture.

http://money.cnn.com/2008/01/07/news...ex.htm?cnn=yes

The season always seems to be winter for GM. Yet for the first time in years, signs of warming are emerging. Wagoner is feeling good about the automaker's progress, especially in the troubled heart of its business: making and selling cars in North America. GM's latest new-car launches - Buick Enclave, Cadillac CTS, Chevrolet Malibu - are getting enthusiastic reviews and generating strong sales. Peter De Lorenzo, a much-followed Detroit online columnist and frequent GM critic, writes, "We are now experiencing a GM the likes of which hasn't been seen since the company's glorious heyday from the mid-1950s to the early 1970s." In naming the new Cadillac its 2008 Car of the Year, Motor Trend gushed in ways surprising even for an enthusiast magazine, advising car buffs to "start practicing using the words 'General Motors' and 'celebrated' in the same sentence."

By slashing both the hourly and salaried workforces, boosting productivity, and reducing health-care costs, he has cut $9 billion (or 22%) out of GM's fixed operating costs. And following years of patient negotiation, he reached a historic agreement with the United Auto Workers to push responsibility for retiree health care off GM's books, a burden that has been adding about $1,400 to the cost of every car and truck GM builds in North America. Once the health-care trust, called a voluntary employees' beneficiary association, or VEBA, is fully funded (GM's contribution: $29.5 billion), the company will have no more responsibility for it. Analysts expect the new union contract to produce as much as $4 billion in annual savings beginning in 2010.

The bureaucrat-in-chief, who has been CEO since 2000, hasn't been afraid to change the status quo. "A lot of success in this business," says Wagoner, "is having a big plan and implementing it better than the next guy." Three years ago Wagoner put his big plan into operation when he personally took charge of product development, manufacturing, and marketing and sales for North America. His decision to put his reputation - and perhaps his tenure as CEO - on the line finally put some steel behind GM's repeated promises to become more competitive. By setting a few clear and easily understood performance targets, Wagoner has led GM to within a neck of catching up in labor productivity and cost with its No. 1 competitor, Toyota. Around GM there is growing confidence, as it prepares to celebrate its centennial year in 2008, that the company is ready to shrug off any lingering whispers of bankruptcy and reclaim its title as an industry leader even if, as many expect, it loses its global sales crown to Toyota.

While Wagoner has North America moving in the right direction - GM cut net losses from $4.6 billion in 2006 to just $400 million in the first three quarters of 2007 - he admits to frustration. "[If] I would have told you [a decade ago] that we would be pretty much head-on competitive [with Toyota] in labor productivity, very competitive in cost, doing products that are being acclaimed as these are, and have made a health-care breakthrough, I think you would probably have written that we would be highly profitable. And so you say, 'How does that feel?' I think that's a little disappointing."

What GM needs to complete the turnaround is a stronger U.S. auto market. Annual vehicle sales have been running below the expected level of 17.2 million units for the past two years, and 2008 is expected to be the worst sales year in a decade. But that could translate into pent-up demand at the beginning of 2009 for some 3.2 million vehicles, since consumers won't delay the purchase of new cars indefinitely. Some GM executives expect the market to turn as early as the second half of 2008. If Wagoner has learned anything, it's to be bold and then to be patient. "The moral to the story is that there's very little that you can't accomplish, but a lot of these things take time. Which isn't an excuse but is a statement that you'd better get on the path, because these things don't turn on a dime." If GM can just stay on the path through the next patch of bad weather, we may finally be able to tell the comeback story the world's been waiting for.

[Lichtronamo]

Please hold the celebrating until they actually make money building/selling cars in NA. A few hits (and some misses) out of approximately 50 models and eight brands means lots of work yet to be done.

[osv_alero]

The good press seems to be coming fairly regularly for GM now days. We can only hope they can speed up the intro of their smaller lineup of cars to continue that good press.

[New_Mexico_Sunset_on_Rt66]

I agree, this is still an uber-competitve environment. But people I speak with who do not follow the auto industry as closely as I do, admit that the perceptions are that GM is on the uptick and ahead of their domestic competition.

What I've been saying for a few years now is that 1 or 2 great products will not complete the revolution, but rather a proven track record. What I've been seeing on these pages of GMI these past few years is a far cry from the white-hot intense disdane we were talking about for what GM was putting out in the early part of this century. The Kappas, the Lambdas, the Epislons and Zetas are all strong products. What I see is don't change a damn thing, just continue to refine the interiors, sculp the exteriors and seek the best materials.

It boils down to product, product, product, product, product.

And if DeLorenzo is saying less bad things about you, that's got to be a good thing.

[Ambalanche]

GM is definately on the uptick. You could say they are on a Mission! That's not something many would say even just a few years ago. Now that the hot products are finally hitting, people are taking notice!

[tgagneguam]

This article nicely points out all the good, important work that GM (some execs, designers, engineers, the UAW, dealers, line workers-all the people who responsible for the success or failure of the Company) has accomplished in the past 5 years or so. It also nicely addresses, with parenthetical support from Wagoner himself, that there's much more work to be done. A balanced, long-term vision. How refreshing to see in an American corporation.

...If GM can just stay on the path through the next patch of bad weather, we may finally be able to tell the comeback story the world's been waiting for.

As a GM fan, I am anxiously anticipating this day!

[1487]

why hasnt there been a story about the CTS-V yet? Specs are on GM's media site. someone needs to put it on the front page ASAP. 550hp sounds like a good way to continue the GM turnaround.

[ponyok67]

I see the turnaround in full swing. Changes happening all over the place. The auto press didn't give it a chance a few years ago. Remember - it's the turnaround, not the arrival -- yet.

[ericmvest]

In regards to General Motors being employment right sized, I remember looking at this past year's Fortune 500 magazine which had a table of the employers with the largest 50 headcounts. The automotive company data from this table is as follows:

Employment Rank / Company / Global 500 Rank / Number of Employees
17 / DaimlerChrysler / 8 / 360,385
25 / Volkswagen / 16 / 324,875
33 / Toyota Motor / 6 / 299,394
38 / Ford Motor / 12 / 283,000
39 / General Motors / 5 / 280,000

[mbukukanyau]

A Few things remains, though..

• Better interior Materials in their bread and butter products
• Death of the "insert Radio Here"
• Bluetooth
• Navigation
• Obesse Plartforms

[skylark68]

Get the new LaCrosse out and impress everyone even moreso than the new Malibu and CTS, replace the Lucerne, and completely revamp Pontiac starting with the G8. I think GM will continue to turn heads in the next couple of years.

[drew770]

Originally Posted by mbukukanyau

A Few things remains, though..

• Better interior Materials in their bread and butter products
• Death of the "insert Radio Here"
• Bluetooth
• Navigation
• Obesse Plartforms

Don't forget the Feast or Famine mentality at GM.
Because GM insist on this different Brand for every occasion. GM doesn't have enough resources to spread to each brand equally at any given time. So Saturn gets new products while Pontiac and Buick cars die on a vine. Cadillac gets one new product CTS while everything else on the lot looks like crap for a couple of years until who knows when!
Its leads the question why market share continues to fall even when new products are introduced.
Because there are so much other crap on the lot sitting to the left and the right of the new product that are turning off the consumers!!!!

[ponchoman49]

There is still a lot of work that needs to be done before I will be celebrating.

[ChevroletRevived]

This is all very true but if you think back a bit you have to remember people were calling for Wagoner to resign! Time is needed to turnaround such a huge corporation as this, but in my eyes it's been done in a very dramatic fashion. GM has come very far in just a short amount of time.

[coaster.n3rd]

A highly received small high volume car has yet to show up. Astra is great and will sell well here, but we need a Chevy with some meaning to compliment the mid size homerun Malibu.