GMI Covers GM's "Crisis Mode"

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GMI Covers GM's "Crisis Mode"
Good news is few and far between, so check out the bad!
www.gminsidenews.com
October 3, 2008



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[Buick61]

It's times like this that GM's brass needs to think, "WWSD." Or, "what would Sloan do?"

Alfred Sloan pulled GM out of a Durant-induced near-collapse at at time when there were literally hundreds of competitors. Now GM has, what, 10 competing companies? And they don't have a single best-seller? And they haven't turned a profit since 2004? And they got billions of loans from the government and they're still delaying products and canceling programs?

End of days, my friends. End of days.

[PAULSTS1]

Unless the swap between Chrysler and GM goes through, GM will be in a fight for it's very existence. The problem is: GM waited too long to ask for help, and during the prep stage they didn't do enough to be able to promise repayment of the existing debts. GM is a money pit, it burns untold millions per day, with no fire fighters in sight!

GM is currently committed to a few niche vehicles, a danger for a company that depends on large volume to survive. Again if the Chrysler swap goes through with a proactive management team, there is a chance for GM to survive, albeit a slim one!

[peterj2706]

Originally Posted by Buick61

It's times like this that GM's brass needs to think, "WWSD." Or, "what would Sloan do?"

Alfred Sloan pulled GM out of a Durant-induced near-collapse at at time when there were literally hundreds of competitors. Now GM has, what, 10 competing companies? And they don't have a single best-seller? And they haven't turned a profit since 2004? And they got billions of loans from the government and they're still delaying products and canceling programs?

End of days, my friends. End of days.

Sadly true. They just don't seem to have clue as to where to go next. No best seller, because no best in class (ex. the vette). Always a day late, with products that don't quite measure up to the light of day, or are targeted to yesterday's needs.

Well, they can always sell off another plant/division and pay the bills for a few more days. I'd love to see what their 'golden parachutes' look like, somehow I'm sure that they are very well funded.

[logansowner]

Well first, nobody needs an Escalade ESV, kill that. THe escalade/Tahoe/Yukon could all be replaced by Lambda vehicles. The Acadia is a damn nice truck, but they have a look to them that doesn't scream car chassis, which is a positive feature. The Acadia is good enough to become a Cadillac, so long as you kill off a few others, don't need 6 of them floating around.

GM is not in an unfix able position, what they are in is a tough situation with nobody at the top who is intelligent enough to fix it.

[windvale]

Just an alternative thought...but this might be a good time for GM to declare bankruptcy. I know bankruptcy has some downsides, but it would allow GM to do the following:
1) negotiate an even more competitive deal with the UAW
2) downsize to just Chevy and Cadillac, and get rid of overlap once and for all
3) get out of franchise agreements w/ Buick/GMC/Pontiac dealers

I know bankruptcy is a bitter pill...but let's be real, without a massive immediate reorganization GM will fail within a year and probably get taken over by the US government.

As far as GM's reputation taking a hit from bankruptcy...get real, GM's reputation is pretty well sh1t in the public's eye anyway.

[Ultra Magnus]

Originally Posted by windvale

Just an alternative thought...but this might be a good time for GM to declare bankruptcy. I know bankruptcy has some downsides, but it would allow GM to do the following:
1) negotiate an even more competitive deal with the UAW
2) downsize to just Chevy and Cadillac, and get rid of overlap once and for all
3) get out of franchise agreements w/ Buick/GMC/Pontiac dealers

I know bankruptcy is a bitter pill...but let's be real, without a massive immediate reorganization GM will fail within a year and probably get taken over by the US government.

As far as GM's reputation taking a hit from bankruptcy...get real, GM's reputation is pretty well sh1t in the public's eye anyway.

If GM gets rid of all divisions but Chevy and Cadillac, I will be through with GM. I have only bought Pontiacs, GMCs and Buicks. I think there are others out there with the same opinion. Afterall, look at what happenned after GM shuttered Oldsmobile. Those people didnt buy Buicks or Chevys, they bought Hondas and Toyotas because they felt abandoned. GM can cut models without cutting brands. They just havent shown the guts to do so.

[windvale]

Originally Posted by Ultra Magnus

If GM gets rid of all divisions but Chevy and Cadillac, I will be through with GM. I have only bought Pontiacs, GMCs and Buicks. I think there are others out there with the same opinion. Afterall, look at what happenned after GM shuttered Oldsmobile. Those people didnt buy Buicks or Chevys, they bought Hondas and Toyotas because they felt abandoned. GM can cut models without cutting brands. They just havent shown the guts to do so.

This is 2008, not 1968.

Division overlap is breaking GM's back.

If GM can focus on product/marketing for just two brands (Chevy/Cadillac) they have a chance at survival. Building every flavor of platform to suit every taste is a losing proposition, and the profit numbers for the last decade bear this out.

[RamJet502]

GM needs to put its best products under Chevrolet and Cadillac and kill or sell every other division.

[2002 Caddy]

Originally Posted by windvale

2) downsize to just Chevy and Cadillac, and get rid of overlap once and for all

People who say this haven't been to a Cadillac dealership in over 10 years...
Cadillac like all other "Not Chevy" divisions have been bled of product and product development since 2000.

To use your quote

This is 2008, not 1968.

Cadillac's image is almost as low as the number of cars that it sells. It is at least as damaged as Pontiac, Saturn, Saab, you name it. I would say more so.

A division can NOT survive on one car.

[wescoent]

Better idea. Corporate re-shuffling.

Establish a GM Asset Management LLC holding company, then sell the GM brands to this new company for $1 each. They will be responsible for product design, product direction, brand management, and advertising.

In turn, they can spin off the various brands into independent or combined ops.

Then, establish Fisher Coachbuild LLC. They design the exterior and interiors for all GM products, and operate as a contract outfit for GM Asset Mgmt. GM Asset Mgmt pays Fisher to design products, but they will also accept bids from other private product design firms.

Then, take the remaining assets of GM, and rename them GM Assembly. Take existing GM stock, and give shareholders one share of GM Asset Mgmt, and Fisher Coachbuild. Then, have GM Assembly declare bankruptcy, and reorganize.

GM Asset Mgmt can then contract out the vehicle design and assembly to the lowest/best bidder for the contract work, allowing them to focus simply on managing the brands.

[wescoent]

Originally Posted by 2002 Caddy

A division can NOT survive on one car.

GUTEN ABEND!

[jkr2106]

Originally Posted by wescoent

Better idea. Corporate re-shuffling.

Establish a GM Asset Management LLC holding company, then sell the GM brands to this new company for $1 each. They will be responsible for product design, product direction, brand management, and advertising.

In turn, they can spin off the various brands into independent or combined ops.

Then, establish Fisher Coachbuild LLC. They design the exterior and interiors for all GM products, and operate as a contract outfit for GM Asset Mgmt. GM Asset Mgmt pays Fisher to design products, but they will also accept bids from other private product design firms.

Then, take the remaining assets of GM, and rename them GM Assembly. Take existing GM stock, and give shareholders one share of GM Asset Mgmt, and Fisher Coachbuild. Then, have GM Assembly declare bankruptcy, and reorganize.

GM Asset Mgmt can then contract out the vehicle design and assembly to the lowest/best bidder for the contract work, allowing them to focus simply on managing the brands.

Wow I've never heard that scenario before; it seems pretty interesting. Could you identify any potential drawbacks to this plan?

BTW, are you in finance or corp. law? That sounds like a very I-banking-type response and a huge % of people from my school go into I-banking or Consulting. But needless to say, seniors are a little antsy this recruiting season.

[godsthere]

Gm either needs to start leasing cars again or drastically lower prices.
The payments on cars are way to high for most people.

[wescoent]

Originally Posted by jkr2106

Wow I've never heard that scenario before; it seems pretty interesting. Could you identify any potential drawbacks to this plan?

BTW, are you in finance or corp. law? That sounds like a very I-banking-type response and a huge % of people from my school go into I-banking or Consulting. But needless to say, seniors are a little antsy this recruiting season.

I-bank, JPM Chase.

Specific downsides? Aside from the union being busted, massive layoffs, it's incredibly cruel and borderline unethical, and the fact that GM management doesn't have the stones to do it?

It's only a basic framework of a plan that I would need to develop more in-depth. It's a concept of creating a bad asset holding company, spinning off the good parts, and letting the bad part sink. I've done it before, and holy heck does it make people mad.