Buickman: Call to Action

[Joe in T.O.]

Originally Posted by fp115

But wasting time on something that will not bring GM into profitability would look horrible to the government and other investors.

fp115 I must say I am surprised at your comments. I thought you were more for GM. I may be mistaken, but judging by your "patent", you are merely here to make money off GM's restructuring. I read the RTG plan and it does say to implement it in "stages". Some of Buickmans suggestions are based on GM history which is proven. The absolute top priority should be changing GM's negative perception in the marketplace.

I am personally sad that Rick was forced out but shame on you if you " make sure" Buickmans plan - or even parts of it - don't make it to Fritz' desk.

In closing, let me give you this fresh example in todays news: GM to announce new model to be built in Ontario, Canada. The article talks about the GMC Terrain and the "last new model" Toyota Rav1V last november. No mention of the Equinox or Camaro. The perception is a glimmer of hope but it could have been augmented considerably "at no cost" to say "3 new models headed for Ontario" simple and cheap.

We give a damn about GM and don't want to see it go BK.

[nailhead425]

Originally Posted by 2002 Caddy

We always come around to "build quality" and yes it IS important... but ask yourself this...
1)Are not our cars the best they have EVER been?
2)Are they not BETTER then the best from Honda, Nissan, Toyota?
3)Are our designs not state of the art and competive with the best of the best?

1) Overall? Yes. Indvidiually, pretty much.
2) No. Some are, but not all, and that's the real point.
3) Some are. FWD 300hp V-8 W-bodies are a joke.

Truly great products have an ability to sell themselves.

[2002 Caddy]

Originally Posted by RamJet502

I see what your saying but I was looking at it a different way. What I meant by profit margins was the fact that GM makes almost zero profit on passenger cars because it costs more to make them then they can sell them for. Trucks and SUVs kept GM alive because they had huge profit margins above their production costs but that's over now.

I'm asking the question how does RTG overcome high production and legacy costs ensuring profitability in an automobile market where sales could be low for quite some time?

I can't speak specifically to RTG.. But anything that sells one more car/truck helps.

Trucks were more profitable on the variable part (something like 15,000 in parts and labor sold for 30,000) A CTS on the other hand might cost 25,000 in parts, etc and sold for 30,000... A Cobalt might be even tighter 15,000 in parts selling for 18,000 (ALL MADE UP NUMBERS for illustration purposes ONLY)

So, if you could swap 1 for 1 a CTS customer for a NEW truck customer that was a good plan... swap a Cobalt customer for a NEW truck buyer EVEN BETTER... We can even see real life evidence that this was the plan. When they killed the Camaro they told POed customers to consider a SSR... I think about 12 out of 30,000 did.. What actually occurred was we managed to keep all existing truck customers, we won very few new ones and we LOST all of the car customers. "Normal" Car customers were replaced with fleet sales.

And now that I have you thinking variable vs fixed costs you have to understand that at GM (unlike my "for example post") they DID NOT just divide the fixed costs evenly.

As the old saying went there are lairs, damn lairs, and statisticians... Well at GM there were liars, damn liars, and accountants.

Fixed costs were assigned across divisions and car lines using calculations that would give Steven Hawking a head ache.

Here is a mind blower... in many cases fixed costs were not assigned based on actual sales (as 99% of the "real" world does it) but based on sales expectation/projections.

This means that a car like the CTS get WAY more of its share of fixed costs because it stable mates (STS and SRX) never came close to sales targets.

I could go into theory as to why technically the "truck swap" made no business sense.. But let me just put it to you this way. If you are running a company where you have ZERO excess capacity.. THEN, ya you want to focus on your most profitable products... GM on the other hand, since about 1980 has excess capacity all over the place... When you have this situation, you want to make ANY and EVERY car that you can sell where the variable costs are less then the sale price.

GM knew this... there is real life evidence of this too... the 29% badges that everyone in the RenCen wore for a few years happen to represent the "fixed cost" tipping point... Pass the 29% line and you pass the 200 units line in my example above. And then everyone panics.

[LeSabre]

Originally Posted by nailhead425

1) Overall? Yes. Indvidiually, pretty much.
2) No. Some are, but not all, and that's the real point.
3) Some are. FWD 300hp V-8 W-bodies are a joke.

Truly great products have an ability to sell themselves.

This combination is doesn't make much sense at all...a contradiction if you will. The horsepower number is irrelevant.



!!

[LeSabre]

Originally Posted by page2171

I had to read your post a couple times to make sure, but I am with you on Buickman's RTG.

Thanks!



!!

[t-rex]

Originally Posted by 2002 Caddy

I can't speak specifically to RTG.. But anything that sells one more car/truck helps.

Trucks were more profitable on the variable part (something like 15,000 in parts and labor sold for 30,000) A CTS on the other hand might cost 25,000 in parts, etc and sold for 30,000... A Cobalt might be even tighter 15,000 in parts selling for 18,000 (ALL MADE UP NUMBERS for illustration purposes ONLY)

So, if you could swap 1 for 1 a CTS customer for a NEW truck customer that was a good plan... swap a Cobalt customer for a NEW truck buyer EVEN BETTER... We can even see real life evidence that this was the plan. When they killed the Camaro they told POed customers to consider a SSR... I think about 12 out of 30,000 did.. What actually occurred was we managed to keep all existing truck customers, we won very few new ones and we LOST all of the car customers. "Normal" Car customers were replaced with fleet sales.

And now that I have you thinking variable vs fixed costs you have to understand that at GM (unlike my "for example post") they DID NOT just divide the fixed costs evenly.

As the old saying went there are lairs, damn lairs, and statisticians... Well at GM there were liars, damn liars, and accountants.

Fixed costs were assigned across divisions and car lines using calculations that would give Steven Hawking a head ache.

Here is a mind blower... in many cases fixed costs were not assigned based on actual sales (as 99% of the "real" world does it) but based on sales expectation/projections.

This means that a car like the CTS get WAY more of its share of fixed costs because it stable mates (STS and SRX) never came close to sales targets.

I could go into theory as to why technically the "truck swap" made no business sense.. But let me just put it to you this way. If you are running a company where you have ZERO excess capacity.. THEN, ya you want to focus on your most profitable products... GM on the other hand, since about 1980 has excess capacity all over the place... When you have this situation, you want to make ANY and EVERY car that you can sell where the variable costs are less then the sale price.

GM knew this... there is real life evidence of this too... the 29% badges that everyone in the RenCen wore for a few years happen to represent the "fixed cost" tipping point... Pass the 29% line and you pass the 200 units line in my example above. And then everyone panics.

Jeeze even those whopping 3.0 credit hours of MicroEcon I took back in 1985 taught me enough to understand what you're saying.

Wharton MBA's, correct me here, but I vaguely remember a concept known as allocation efficiency (if memory serves) which dictates that producing the exact number of units demanded by customers results in zero marginal costs.

With set fixed costs, and zero marginal costs, doesn't increasing the demand for the product equate to both higher economic profit and higher accounting profit? (if I'm wrong, forgive me, it's been 24 years)

Wouldn't Buickman's plan to increase sales result in this?

And is part of GM's problem failure to properly assess fixed costs?

P.S. I HATED that f***in' Econ class and I've been waiting a quarter century to put the little I learned in it to good use!

[fp115]

Originally Posted by member12

The thought process is that another 10 months of sales would probably barely make the Cobalt and HHR's break even point. Stupid, but that's probably the case....and of course, the Cruze probably cost more than the Cobalt to build, so they want to introduce the technology in small car friendly markets before we get it.

Note that the Orlando, the HHR replacement, was put on hold. It's wrong...and it proves that GM is in a rut and still hasn't figured out how to make a small car.

The sad truth is that the Cruze, if on the market today, doesn't exactly have winner written all over it if the euro rags can be trusted. We all know the styling looks like it could have been introduced in 2003. I predict that within a year of it's launch, the Cruze will be outclassed by it's competition and sold at discounts. I have high hopes, but GM has a horrible track record in that market and made the same mistakes over, and over and over again with the same promises.

Cruze will not cost more than the Cobalt to produce. Production for the most part is fixed to the plant's personnel and parts down the line. If anything it will cost GM much less to produce the Cruze than the Cobalt due to changes in the contracts.

The reason the Orlando was delayed is not because GM doesn't know how to make a profit from small cars, but the lack of funds to retool an entire plant. Retooling can range from $500m to $2b depending on the plant and the products you are bringing in.

Originally Posted by Joe in T.O.

fp115 I must say I am surprised at your comments. I thought you were more for GM. I may be mistaken, but judging by your "patent", you are merely here to make money off GM's restructuring. I read the RTG plan and it does say to implement it in "stages". Some of Buickmans suggestions are based on GM history which is proven. The absolute top priority should be changing GM's negative perception in the marketplace.

I am personally sad that Rick was forced out but shame on you if you " make sure" Buickmans plan - or even parts of it - don't make it to Fritz' desk.

In closing, let me give you this fresh example in todays news: GM to announce new model to be built in Ontario, Canada. The article talks about the GMC Terrain and the "last new model" Toyota Rav1V last november. No mention of the Equinox or Camaro. The perception is a glimmer of hope but it could have been augmented considerably "at no cost" to say "3 new models headed for Ontario" simple and cheap.

We give a damn about GM and don't want to see it go BK.

My patent has been in the works for nearly a year now. It was initially striked down by several firms due to laws. Only way to address such issues is by lobbying the government to get these laws changed. I have the plans, the outlines, everything. I could increase sales to GM by about 5-10% just by implementing my process. This also means that no one could ever use a similar process, so GM will finally have a 10 step lead in sales.

Buickman has showed very little respect for me or any of the other GM executives. Has failed to listen to suggestions and make necessary changes to make it a plan that can be implemented. The plan is just a bunch of ideas and would take more time to decipher, assess costs and time allotments. When you have something and want to make it happen, you must do the research, show that it will work and have a detailed outline on implementation. Until I see those changes I fail to look at this situation in any other way.

Throughout the entire process I have never wanted BK, but have been forced to give suggestions in the case it must happen. At this point sides are so uncooperative that BK may only be the answer. In the end people could careless about the thousands and millions of jobs, they will only care about their own money. The government has little understanding about the companies they are attempting to fix and any attempt to indoctrination to these government officials seem to fail. In most cases they would rather listen to the media than listen to studies and information which the company(ies) provide them.

[Buickman]

most of my adult life has been involved with selling cars and talking to dealers across the country. there has been plenty of research done in developing RTG. although there is no one at GM with the same level of knowledge and expertise in retail automotive, all they need to do is welcome ideas from outside the box. furthermore, you'll see in the plan a logical sequence for implementation which is crucial to it's success. remember these are only the first twenty steps, many more exist.

[2002 Caddy]

FP115 for a guy who is done with this thread you seem to keep posting. I would recommend that you read some of the basic business 101 in it... Maybe you will learn something

Originally Posted by fp115

Buickman has showed very little respect for me or any of the other GM executives.

If I read that right, and maybe its just that your English structure is as warped as your POV of most of GM's management, but now we can add "GM executive" to your list of accomplishments?! Wow

Let me put it to you this way... The decisions that you and any of the other GM executives have made have Bankrupted the largest most profitable company on the planet and cost me and my wife about $80,000 in the process. Lets just say the "Other GM Executives" have earned the "very little respect" that they are getting.

[2002 Caddy]

Originally Posted by t-rex

Wharton MBA's, correct me here, but I vaguely remember a concept known as allocation efficiency (if memory serves) which dictates that producing the exact number of units demanded by customers results in zero marginal costs.

With set fixed costs, and zero marginal costs, doesn't increasing the demand for the product equate to both higher economic profit and higher accounting profit? (if I'm wrong, forgive me, it's been 24 years)

Wouldn't Buickman's plan to increase sales result in this?

And is part of GM's problem failure to properly assess fixed costs?

P.S. I HATED that f***in' Econ class and I've been waiting a quarter century to put the little I learned in it to good use!

Yes, yes and yes.

PS while I never failed any course while at University, the closest I came was in the compulsory Economics Class.

Fixed cost managment is normally taught in cost accounting, financial accounting, MARKETING and some of the "Rocket Science" Finance courses

[Chaz_23]

Again, there is division of labor at GM- I assume. Car sales aren't meant to fix everything that's wrong with GM. Everything that's wrong with GM won't be fixed by those marketing and selling cars. You can have the most perfect business structure but it's no good unless you're selling what you're making.

What do you mean by "everyone is putting their time and energy into making sure plans work." Who is everyone? What plans? Can't GM fix its core and find ways to sell more cars- at the same time? I think they can.

It sounds like you are very frustrated in whatever your endeavours are and in turn are trying to frustrate Buickman's attempts.

GM's current model of selling cars doesn't work. That should be obvious. So a different way is needed. One of the reasons GM is in the state it's in is because everyone there (and over at the UAW) has been trying to conserve the old ways in the face of impending disaster.

Originally Posted by fp115

Yes but there is a difference on selling new cars and trying something new to sell new cars. The suggestion in here is to implement a new program that will change how dealers sell cars. Car sales alone isn't what will fix the company. It will only quell problems on a short term basis.

But the thing is, at this time everyone is putting their time and energy into making sure plans work. The ones who launch the ads continue to do the same, the dealers continue to do the same. Sales aren't likely to stop all of a sudden. But in the meantime GM is fixing its core to make sure it can break even from less sales than it previously projected. GM has cut the number down drastically since last year and will have to continue to do this to make sure where sales pick up, it will be making money and it will continue to work this way for years to come.

I've been lobbying for law ammendments for the past months, that will increase sales to all auto makers, mainly GM. I see no point to continue investing time and money into a program that I am not even sure could exist in the future. Why must I spend millions of dollars only to find myself in the same or worse position in two months from now.

Investing new programs, new techniques, new anything for sales at this point is a waste of money, money and time that can be used for the core, which is what GM will be receiving loans for.

[Buickman]

News Flash!!!

GM Retail Deliveries Increase 40% vs. Last Year.

GM Market Share Rises to 30%

Speculators Advance Share Price to $8.00

this is what you would see should Return to Greatness be put into place.

want different results, make changes.

[Buickman]

Originally Posted by fp115

Cruze will not cost more than the Cobalt to produce. Production for the most part is fixed to the plant's personnel and parts down the line. If anything it will cost GM much less to produce the Cruze than the Cobalt due to changes in the contracts.

The reason the Orlando was delayed is not because GM doesn't know how to make a profit from small cars, but the lack of funds to retool an entire plant. Retooling can range from $500m to $2b depending on the plant and the products you are bringing in.


My patent has been in the works for nearly a year now. It was initially striked down by several firms due to laws. Only way to address such issues is by lobbying the government to get these laws changed. I have the plans, the outlines, everything. I could increase sales to GM by about 5-10% just by implementing my process. This also means that no one could ever use a similar process, so GM will finally have a 10 step lead in sales.

Buickman has showed very little respect for me or any of the other GM executives. Has failed to listen to suggestions and make necessary changes to make it a plan that can be implemented. The plan is just a bunch of ideas and would take more time to decipher, assess costs and time allotments. When you have something and want to make it happen, you must do the research, show that it will work and have a detailed outline on implementation. Until I see those changes I fail to look at this situation in any other way.

Throughout the entire process I have never wanted BK, but have been forced to give suggestions in the case it must happen. At this point sides are so uncooperative that BK may only be the answer. In the end people could careless about the thousands and millions of jobs, they will only care about their own money. The government has little understanding about the companies they are attempting to fix and any attempt to indoctrination to these government officials seem to fail. In most cases they would rather listen to the media than listen to studies and information which the company(ies) provide them.

you bring a new meaning and appreciation to the term HOGWASH!

you are ill informed, with failed logic and arguments holding no water. your diatribes are conflicting and your accusations are baseless. put that on your kite and fly it. in simplistic car terms, I am an engine and you're the dipstick.

have fun with that one Sigma...

[fp115]

Originally Posted by Chaz_23

Again, there is division of labor at GM- I assume. Car sales aren't meant to fix everything that's wrong with GM. Everything that's wrong with GM won't be fixed by those marketing and selling cars. You can have the most perfect business structure but it's no good unless you're selling what you're making.

What do you mean by "everyone is putting their time and energy into making sure plans work." Who is everyone? What plans? Can't GM fix its core and find ways to sell more cars- at the same time? I think they can.

It sounds like you are very frustrated in whatever your endeavours are and in turn are trying to frustrate Buickman's attempts.

GM's current model of selling cars doesn't work. That should be obvious. So a different way is needed. One of the reasons GM is in the state it's in is because everyone there (and over at the UAW) has been trying to conserve the old ways in the face of impending disaster.

That is all part of marketing. Marketing is the direct connection between dealerships and GM. Marketing is working on public image, confidence packages,... At this time you will not likely see many new programs because GM is in the process of letting of a very large chunk of its marketing employees over the course of the next few weeks. Having marketing start new programs at this time is unlikely to happen, because those take careful studies, funds and time.

What I mean by everyone is that you have the executives deal with government officials, lawyers, other companies aiding in the process. Middle-management is cutting its workforce while doing the work to support the executives' decisions and changes. Marketing, though suffering cuts, continues to deal with its ad agencies to forward new ideas for ads and has for the past few weeks dealing strictly with consumer confidence.

It seems to me you are confusing selling model. Selling models consist of B to B and B to C. The sales model is and should be purely controlled by dealerships. Essentially outlining what you are supposed to do from the point the customer steps foot into the showroom. GM is responsible for providing advertising content in order to aid showrooms with their sales. Changes which Buickman has been asking will require a lot of time and money to implement into the entire process.

While I do agree, changes will likely be required in marketing. GM's latest approval signals these changes are coming. Marketing building up an e-Team will bring in massive changes to the direction of many ads, so long they build it up correctly.

[Buickman]

Originally Posted by fp115

That is all part of marketing. Marketing is the direct connection between dealerships and GM. Marketing is working on public image, confidence packages,... At this time you will not likely see many new programs because GM is in the process of letting of a very large chunk of its marketing employees over the course of the next few weeks. Having marketing start new programs at this time is unlikely to happen, because those take careful studies, funds and time.

What I mean by everyone is that you have the executives deal with government officials, lawyers, other companies aiding in the process. Middle-management is cutting its workforce while doing the work to support the executives' decisions and changes. Marketing, though suffering cuts, continues to deal with its ad agencies to forward new ideas for ads and has for the past few weeks dealing strictly with consumer confidence.

It seems to me you are confusing selling model. Selling models consist of B to B and B to C. The sales model is and should be purely controlled by dealerships. Essentially outlining what you are supposed to do from the point the customer steps foot into the showroom. GM is responsible for providing advertising content in order to aid showrooms with their sales. Changes which Buickman has been asking will require a lot of time and money to implement into the entire process.

While I do agree, changes will likely be required in marketing. GM's latest approval signals these changes are coming. Marketing building up an e-Team will bring in massive changes to the direction of many ads, so long they build it up correctly.

Let me tell you what marketing isn't...

it isn't:

-discontinuing LeSabre when it's the best selling, highest quatlity vehicle in the market.

-eliminating venerable nameplates with storied histories and brand equity. (ie, Grand Prix, Monte Carlo, Bonneville, Regal, Century, Eldorado,etc..)

-offering the most confusing incentives imaginable with a "Hurry Before It's Over" push, only to be repeated in newly confusing fashion within days of expiration.

-the goofiest advertisments in the media, attempting to "sell the deal", blazing images of drastic discounts. all this while the competition promotes image and lifestyle combined with features and benefits.

-raising prices throughout the year while increasing rebates and "private offers".

-spending millions and millions advertising vehicles at "launch" when the dealers don't have hardly any units in stock, creatiing buzz and excitement, floor traffic and having nothing to sell.

-announcing rebates on new models before the cars or even the brochures have arrived.

I could go on for hours detailing the absolute stupidity of GM management. they are, without question, the reason for GM's decline. today's economic environment is no excuse for decades of misguided leadership, and I use that term very loosely.

However, rather than just throwing stones, I am offering detailed, proven, rational, executable alternatives. Return to Greatness is the answer to our immediate need to sell the cars we have. future product is crucial but right now we have to play the cards we have.

not implementing RTG is no different than leaving Michael Jordan on the bench during the last game of the NBA finals. there he sits with no fouls, the most talented player on the planet, but kept from scoring and winning the game.