Saving General Motors

[Chaz_23]

Flint is right. I don't think there's any reason to believe that the current bunch of fools over at GM are intellectually equipped to deal with what is going on right now.
Thanks Ricky for your services but you can go now (here's your check for hundreds of millions) and take most of the board with you.

[wescoent]

Originally Posted by CobaltSScrazy

Seriously, I can't stand it when people try and compare CTS to the 3/C. Its really just irritating. It's priced that way, but thats because Cadillac is slowly building back its brand equity. They're going to have to sell at a lower price until brand equity is built back up (in like 10 years if they continuously keep working on improving the brand and its products, DEALERSHIPS, and marketing.)

CobaltSS

Also because the CTS isn't nearly as good of a car as either the 5 or the E...

[ponchoman49]

What should GM managers do now?

1) Advertise the hell out of the Cobalt/G5 and Aveo with there new found fuel economy boost for 09
2) Sell off Hummer
3) Show Wagoner the door
4) Weight loss plan across the board
5) Quit copying Toyota/Lexus and BMW styling that is now 2-3 years old
6) Re-organise management
7) Quit the name changing bullcrap. When you have a car name that carrys a reputation such as Camry, Corolla, Accord or Civic stick with it. Of course the car in question carrying that name needs to be a class act to start with.
8) Quit wasting money on Saturn- it is and will always be thought of as that cheaper car brand with the plastic body panals and so so quality
9) Keep products updated and competitive at least every 2 years. There is NO reason in the world that a 2008 Lucerne should still be using an engine and transmission designed in 1995 (3800 series II debut) and 1991 (4T65E debut)
10) Increase production of 2-mode hybrids and speed up that Volt. Diesel options should be available across the board on all full sized pickups and SUV's.

[jamiepeterson2]

The first thing GM should do is restructure into just 2 divisions, not the 4 that Wagoner is suggesting. You have really got to cut to the bone in today's economy without sacrificing the blood and guts.

DIVISION 1: GM
CADILLAC: uncompromising RWD luxury cars; all Cadillacs should be hybrids.
CHEVROLET: mainstream FWD cars and RWD trucks
- SATURN should be relegated to a Chevy sub-brand offering only plug-in hybrids such as the new Chevy Volt.

DIVISION 2: GM SPECIAL PRODUCTS
BUICK: FWD & AWD luxury cars
- SAAB should be restructured as a sub-brand of Buick and offer turbocharged versions of the 9-3 and 9-5 in coupes, convertibles, sedans, hatchbacks and wagons.
PONTIAC: Opel should supply Pontiac (not Saturn) with timely product rather than Holden. Vauxhall, Holden and Daewoo could also benefit from Opel's drawing boards.
GMC should drop its current line-up entirely and be restructured as a sales channel only for Hummer and Opel Movano.
- HUMMER should manufacture SUVs (H2, H3, H4 & HX) and pick-up trucks (T2 & T3) in both 2WD and 4WD on the GMT900 and GMT700 platforms replacing the redundant GMC offerings. Hummers should all be hybrids. This way BPG can offer something entirely different from Chevrolet.

In this business plan you have virtually no product overlap and two strong sales channels. Better brand management is the name of the game.

[PRO_USA1776]

I don't really see the problem with the US government helping out GM and Ford. It is what Asian countries and european ones do for their manufacturers. What is good for the Goose should be good for the Gander! Besides that GM Ford and Chrysler helped us win WWII. Time for the American government to step up. It seems to me that the US governments job is to help US companies when necessary! If the rest of the world doesn't like it, then up theirs!

[dederer]

I agree with the author. The current management has been paid millions and has not positioned the company to deal this the current economy. The hourly workers have suffered and the shareholders have suffered. The leadership has not risen to the challenge.

[ericmvest]

Originally Posted by paul38469

I think that is the most positive article Flint has ever written on GM.

The following is a more recent Jerry Flint column that I thought was very good where he warns Americans that we may become water boys for the Japanese. I sure do not want to be a water boy for the Japanese.

Backseat Driver
Desperate Times
Jerry Flint 06.30.08, 12:00 AM ET

Our government will soon have to decide if we want a domestic automobile industry. If it does nothing, that industry will be dead in three years. There would still be an auto industry here: Toyota, Honda, Nissan, BMW, Mercedes, Hyundai and Kia, maybe even Volkswagen and Fiat, would be assembling cars in the U.S.

But we would be like Britain, which has no British-owned auto companies. The Japanese and Americans build cars there. The workers are British but the nameplates are Toyota (nyse: TM - news - people ) and Ford.

This foreign-owned auto industry in the U.S. would be a nonunion industry, and largely southern. The Rust Belt would get rustier. Much of the high-salaried work would be done abroad--the engineering, the toolmaking, the designing. Much of the profit would go abroad. We Americans would be the water boys, the assembly workers. That is the way we could end up.

Actually, it is happening now. The once great General Motors Corp. (nyse: GM - news - people ) is working down to 50,000 U.S. union workers. The Big Three's share of sales dropped to 45% in May, and I believe that the share could drop toward 40% if present trends continue.
Our presidential candidates all decry the loss of manufacturing, the factories shut, the idled workers. They blame Mexico or China or Japan, but they aren't helping save anything. They are part of the problem.

This industry needs help now--if it is to be saved. And government isn't helping, it's piling on.
How serious is the danger? Frankly, I don't think the executives at Chrysler know what they are doing--or maybe it's just that they don't have the money to do anything, like building their own new small car or rebuilding the Dodge division. Those private equity pockets seem to be empty.

The General Motors kitty is going down $1 billion a month, and in two years it could be gone. What then? gm could abandon the U.S., I suppose, and continue abroad, but that's happening anyway. Nearly 60% of gm's sales are overseas.

Ford seems to have more direction right now, and more gumption and fighting spirit, but Ford is in trouble, too.

The Detroit car companies aren't saying this, of course. If they complained or asked for anything, they would be buried under an attack from the greens. We might be greener if all our factories closed, if power plants shut, if everyone rode to global warming meetings on Chinese-made bicycles and if everyone went a little hungry. Our presidential candidates should decide if that's the way they want it. But if they want to keep some factories, if they want Detroit to survive, they should act.

What to do? The most important thing is to ask the automakers, and I would guess they would tell you:
Halt immediately all new regulations--safety regulations, emission regulations, bumper regulations, mileage regulations. The cars are safe and clean now, I believe, and Detroit needs every dollar and every engineer to face the storm, to build new fuel-efficient models, and believe me, they want that more than even Al Gore. Fuel economy needs a sensible approach. The proposed standards (35mpg for cars and 28 for trucks by 2015) may be impossible to reach or could add thousands ($15,000 or more) to car prices. It won't help if automakers go broke trying to meet impossible goals.

Someone has to tell California to stop making its own rules. It's impossible to create two auto industries, one for California and a few copycat states, and one for everyone else. The lawyers' fees will destroy Detroit.

Whose fault is this? In no small part, Detroit's executives. Yes, Asian car companies cheated. They kept us out of their countries and kept their currencies weak. Yes, our government changed the rules so foreign brands could sell in domestic dealer showrooms, making it cheap for them to attack this market. Yes, our unions helped by ignoring the destruction they were causing until it was almost too late. State governments helped by giving foreign carmakers huge tax breaks when they build plants. Then there was bad luck, or whatever it is that has pushed gasoline prices to $4 a gallon.

But the blame has to fall on Detroit's executives. They didn't know enough about their own business to build better cars than the foreigners did, and they were unprepared for a change that was sure to come, sooner or later.

But that's not the issue. If we want a home-owned industry, our government will have to help for a change instead of piling on, treating the automobile and the industry like devils.

But it's our choice. The Brits don't mind being water boys. Maybe we won't either.

[ericmvest]

Originally Posted by PRO_USA1776

I don't really see the problem with the US government helping out GM and Ford. It is what Asian countries and european ones do for their manufacturers. What is good for the Goose should be good for the Gander! Besides that GM Ford and Chrysler helped us win WWII. Time for the American government to step up. It seems to me that the US governments job is to help US companies when necessary! If the rest of the world doesn't like it, then up theirs!

I agree with your post 100%. To even the playing field the Federal Government should help the Big Three. A large tax deduction for series hybrids would be a big help to get the Volt off the ground. It seems that our Federal, state, and local governments have helped the Japanese car manufacturers more than our domestic manufacturers in recent years. The Japanese Government is very protective of their automotive industry and our Federal Government is dismissive of our automotive industry and helpful to the Japanese. It is a very odd and self-destructive state of affairs.

[ericmvest]

Originally Posted by dederer

I agree with the author. The current management has been paid millions and has not positioned the company to deal this the current economy. The hourly workers have suffered and the shareholders have suffered. The leadership has not risen to the challenge.

The management could have done better, but the Big Three's problems are bigger than just management incompetence. To quote the Jerry Flint article "Desperate Times":

Whose fault is this? In no small part, Detroit's executives. Yes, Asian car companies cheated. They kept us out of their countries and kept their currencies weak. Yes, our government changed the rules so foreign brands could sell in domestic dealer showrooms, making it cheap for them to attack this market. Yes, our unions helped by ignoring the destruction they were causing until it was almost too late. State governments helped by giving foreign carmakers huge tax breaks when they build plants. Then there was bad luck, or whatever it is that has pushed gasoline prices to $4 a gallon.

[A.J.]

Originally Posted by Forbes.com

That division's upcoming rear drive sedan, which targets the Mercedes E Class and BMW 5 Series, is crucial.

What upcoming sedan? The CTS already has that segment covered.

Apparently, magazines/websites are comparing the CTS to the BMW 3 and M-B C. That is wrong. If I'm correct, the CTS was designed to compete with the BMW 5, and if someone can prove me wrong and find a link to a comparo between the CTS and the 5, I'll be happy.

Heck, what are magazines going to compare the upcoming BTS to...BMW's 1? COME ON!

[markusername]

Originally Posted by jason4225

Here is an interesting article with a few highlights. There is much more at the link below.

Saving General Motors
Jerry Flint
Forbes.com

The crisis at General Motors is not of its making. The economy is weak, gasoline prices are at record levels and the U.S. auto industry is in a big slump. Much of the blame lies elsewhere, but the auto giant is in peril....

[/url]

Maybe I'm mistaken but are not Honda and Toyota making Billions in PROFITS in the EXACT same market that GM is? Do gas stations charge Civic owners only $1 per gallon? Do Camry owners home values go up instead of down because they own a Camry?

Your right it's not GM's managements fault for losing money for years, losing market share for years, stock price being at a 33 year low....etc... Its the fault of the weather, the media, the tide, etc...

[Rocket 88]

Originally Posted by guitarlix

A lot of GM's current problems stem from severe mismanagement of its brands.

People trying to pick Saturn over Buick or Pontiac are INSANE.

You can't develop a strong brand image by juggling these many brands. As far as which brand stays, even developing AWARENESS of the Saturn brand would take millions and would be a HUGE waste of resources and money. Nobody in America cares a crap about German products. Buick and Pontiac are FAR stronger brands and throwing those off away in place of Saturn would be a disastrous move.

A lot of what you wrote make sense, but I think your off on a few things.

First, lots of people car about German products. Thats why you see so many Mercedes, BMW, VW and Audi's.

Second, those German Saturns (which are actually made in Belgium and Hungary) allow GM to sell a wider range or products then the rebadges sold in the more traditional divisions like Pontiac and Buick.

Third, its not like Buicks are big sellers and Saturn isn't. Especially when you consider the difference in the number of dealerships. Buick has also been starved of products and has no lure for young buyers. Saturn at least attracts people who normally would not consider GM products.

I'm not saying Saturn doesn't have its own problems but it has a lot of things going for it. Buick has a previously good name and one good CUV - also available from GMC, Saturn and soon Chevrolet.

Which brings me to my real point: GM's management main failing is not knowing how to distribute products. If Saturn is the US Opel division why is it selling the Aura and Outlook? These guys just can't help themselves.

What GM needs is a product plan that works.

[prototype66]

Originally Posted by paul38469

I think that is the most positive article Flint has ever written on GM.

Agreed! Great read and a suprise coming from this sourse!
Flint no less! Lets hope they can really do it even if it is necessary to clean house of the dead wood. Something absolutely has to happen soon! (So much for my "give them time" Rant!)

[prototype66]

Originally Posted by markusername

Maybe I'm mistaken but are not Honda and Toyota making Billions in PROFITS in the EXACT same market that GM is? Do gas stations charge Civic owners only $1 per gallon? Do Camry owners home values go up instead of down because they own a Camry?

Your right it's not GM's managements fault for losing money for years, losing market share for years, stock price being at a 33 year low....etc... Its the fault of the weather, the media, the tide, etc...

Your argument makes no sense dude.
Japan has a much lower labor rate, the dollar has lower value then the yen,trade agreements are heavily slanted in japans favor and the japanese government helps with development funding . Add that to the mis management of GM over the past 30 years and you have the problem.I dont think you thought it through.....
Think about it. I mean really
come on.........gas stations?????? Really?
And by the way, yes the media does impact the thinking of the general public,
It worked on you.

[windvale]

Originally Posted by paul8488

This is horribly frustrating. How can GM manage this? The lightest car is the least fuel efficient of its peers. Did they just start making cars yesterday? Why can't they put a proper engine in their subcompact car? It's silly that they will soon have 4 similar Lambdas but not one proper subcompact in North America.

And the answer is...because up until last month GM couldn't have given a tinker's damn less about small cars. The Aveo is a POS insult to the car buying public, and it has even further eroded any credibility GM ever had in the US small car business...