Jerry York: 2010 GM IPO “The Dumbest Thing in the World”

[Idler Arm]

from www.thetruthaboutcars.com
Robert Farago

You can certainly understand the feds’ desire to make GM’s nationalization look like a temporary measure rather than the economic quagmire that is was, is and will be. But anyone with half a brain knew that the not-so-dynamic duo’s suggestion of a 2010 share offering was about as believable as the idea that the U.S. government can save money by creating a new entitlement program. OK, less. Add Jerry York to that half-a-cranium club. Speaking at The Reuters Auto Summit, the ex-ChryCo exec, former GM board member and Kirk Kerkorian front man called any discussion of a 2010 GM IPO the “dumbest thing in the world.” Seems that “They’re not going to be able to make up all the volume that they had with the four brands they are shedding with four brands they are retaining . . .

full text @ http://www.thetruthaboutcars.com/jer...-in-the-world/

[K-1]

Jerry needs to look at the latest sales release. The four remaining brands accounted for 95% of retail sales.

[Idler Arm]

Originally Posted by K-1

Jerry needs to look at the latest sales release. The four remaining brands accounted for 95% of retail sales.

the Chinese have a saying…”xia mao peng dao si lao shu…” trans…”blind cat catches dead mouse”.

[K-1]

Originally Posted by Idler Arm

the Chinese have a saying…”xia mao peng dao si lao shu…” trans…”blind cat catches dead mouse”.

Meaning what, exactly? They got lucky? They just happened to "stumble upon" these buyers?

EDIT: Funny thing. I just read nearly the exact same post over at TTAC... Buickman, you're back!!! And here I thought you were banned.

[Canuck]

Fargo has to get his parting shots at GM before he leaves TTAC.

[Idler Arm]

Originally Posted by K-1

Meaning what, exactly? They got lucky? They just happened to "stumble upon" these buyers?

There's a difference between The Beach Boys and a one hit wonder. GM cannot possibly sustain any sort of sales gains or market share when cutting dealers and continuing the same disastrous merchandising. Although some ads are improved, they still feature distress pricing while the incentives continue to confuse dealers and customers. They drop to sub 15% by year end without dramatic change.

ps

GM had inventory left over after C4C while others did not. Don't worry about the Chinese for a while, watch out for the Koreans.

[Canuck]

Originally Posted by Idler Arm

There's a difference between The Beach Boys and a one hit wonder. GM cannot possibly sustain any sort of sales gains or market share when cutting dealers and continuing the same disastrous merchandising. Although some ads are improved, they still feature distress pricing while the incentives continue to confuse dealers and customers. They drop to sub 15% by year end without dramatic change.

ps

GM had inventory left over after C4C while others did not. Don't worry about the Chinese for a while, watch out for the Koreans.

Are you giving Lutz credit for better marketing? How much luck is involved when dealers can't even get stock?

[mbukukanyau]

Jerry york is a minion

[mgescuro]

Well, he has a point.

But the part about GM not making up the volume?? I think the new GM can absolutely do that.

Why?

The remaining 4 brands will grow. And they will grow to expand into the niches left vacant by Hummer, Saab, Pontiac, and Saturn.
We can no longer think of Chevy as "the American family car." It must be thought of as the all purpose American car, taking over Pontiac performance and Saturn's style.
GMC can easily take over HUMMER's niche, assuming GMC finds the offroading niche a viable market.
Cadillac must take over Saab's niche, which should be easy with ATS and CTS families.

but the brands must grow. Cadillac can't live on CTS and ATS. It needs families. Coupes, sedans, wagons, convertibles for both families.
Chevy must expand into "City" cars and smaller niches as well as more performance vehicles.

We need to start thinking out of the box. If GM keeps the remaining 4 brands as they are, then absolutely, we will have a problem.

[K-1]

Originally Posted by Idler Arm

There's a difference between The Beach Boys and a one hit wonder. GM cannot possibly sustain any sort of sales gains or market share when cutting dealers and continuing the same disastrous merchandising. Although some ads are improved, they still feature distress pricing while the incentives continue to confuse dealers and customers. They drop to sub 15% by year end without dramatic change.

Yet, even without your supposed improvements, 95% of their shoppers still went to a core brand.

Originally Posted by Idler Arm

ps

GM had inventory left over after C4C while others did not. Don't worry about the Chinese for a while, watch out for the Koreans.

Umm... no, they didn't. Inventory was drastically short during and after C4C, and it's still short for some models.

[Idler Arm]

Originally Posted by mbukukanyau

Jerry york is a minion

Jerry York is a genius. I know the man personally and have found him to be an outstanding gentleman with a very unique understanding of our business. There is a reason a guy like Kirk Kerkorian trusts his judgement. He predicted Penske would walk away from Saturn, I thought he was dead wrong. Shows you what I know compared to Jerry. If Wagoner had listened to him back in '06, he just might still be Chairman.

[K-1]

Originally Posted by Idler Arm

Jerry York is a genius. I know the man personally and have found him to be an outstanding gentleman with a very unique understanding of our business. There is a reason a guy like Kirk Kerkorian trusts his judgement. He predicted Penske would walk away from Saturn, I thought he was dead wrong. Shows you what I know compared to Jerry. If Wagoner had listened to him back in '06, he just might still be Chairman.

There has been more than one person who predicted Penske couldn't make the Saturn deal work. York certainly wasn't alone in that. And everyone saw the deal was shaky to start. Sourcing, rather than manufacturing was very "outside the box."

[Slideways]

Originally Posted by mgescuro

But the part about GM not making up the volume?? I think the new GM can absolutely do that.

Why?

The remaining 4 brands will grow. And they will grow to expand into the niches left vacant by Hummer, Saab, Pontiac, and Saturn.
We can no longer think of Chevy as "the American family car." It must be thought of as the all purpose American car, taking over Pontiac performance and Saturn's style.
GMC can easily take over HUMMER's niche, assuming GMC finds the offroading niche a viable market.
Cadillac must take over Saab's niche, which should be easy with ATS and CTS families.

but the brands must grow. Cadillac can't live on CTS and ATS. It needs families. Coupes, sedans, wagons, convertibles for both families.
Chevy must expand into "City" cars and smaller niches as well as more performance vehicles.

We need to start thinking out of the box. If GM keeps the remaining 4 brands as they are, then absolutely, we will have a problem.

I agree. I'm looking forward to seeing the broader portfolio of the core brands.

[megeebee]

Originally Posted by Idler Arm

Jerry York is a genius. I know the man personally and have found him to be an outstanding gentleman with a very unique understanding of our business. There is a reason a guy like Kirk Kerkorian trusts his judgement. He predicted Penske would walk away from Saturn, I thought he was dead wrong. Shows you what I know compared to Jerry. If Wagoner had listened to him back in '06, he just might still be Chairman.

I do not know Mr. York, so I leave his qualities as a person to you. But you are absolutely correct in the other points of your post. I thought he was dead-wrong when he said GM needed to shed all those brands. Well, how right could he have been? It may have saved the taxpayers some money too.

If he thinks an IPO next year is a bad idea, I'm inclined to agree.

[Idler Arm]

Originally Posted by megeebee

I do not know Mr. York, so I leave his qualities as a person to you. But you are absolutely correct in the other points of your post. I thought he was dead-wrong when he said GM needed to shed all those brands. Well, how right could he have been? It may have saved the taxpayers some money too.

From first hand experience I can tell you he is most polite, soft spoken, unassuming, and brutally correct when he does speak. I consider myself quite fortunate to have him as a friend.

No one is right all of the time, yet Jerry's track record is phenomenal. From Chrysler to IBM, to Tyco, to Apple, to GM, he has repeatedly shown comprehension and brilliance in offering solutions.