By the way, did this independent mechanic have the Tech II tool required to configure the radio for the vehicle it's installed in?
Another dagger in GM
- Thread starter Alan
- Start date
- Status
G.M. uses the accural method for accounting just like other big companies. simply put,the delphi receivables are counted as income before the actual payments are made.to add insult to injury,taxes have been paid on this "income" as well. what we will see in the near future are the offsets and either a tax credit toward future tax liability or a refund. also the delphi debacle should earn them a healthy write-off.sure they will never see the money, but they will be able to offset losses relative to gains with a carry foward provision to last ..uh for quite some time. fwiw, I just changed a delphi OEM alternator in my 97 astro.over 220k miles.
JD Power's 3-year reports (they no longer do 5 year reports) indicate that GM's long term reliability is good.
This link, which isn't working right now but will after this evening, has more details:
http://www.jdpower.com/news/releases/vds2005089.asp
This link, which isn't working right now but will after this evening, has more details:
http://www.jdpower.com/news/releases/vds2005089.asp
"Problem is if GM goes bust, the foreign transplants will not provide anywhere near the jobs that GM did. Like it or not, we ALL may be affected by this. It wouldn't hurt my feelings if the import lovers/American industry haters lost their jobs first."
Of course! Overstaffed Ford and GM is a part of their financial problems! Haven't you been reading about the "Jobs Banks" articles just run in the Wall Street Journal? and on talk radio?
And workers with health care with NO co-pay!!!
Reality check, dear Cletus. Maybe Ford and GM workers need to get over themselves. They are NOT that important anymore that the whole country gets held hostage when there is a strike at one of those firms. As we were all told to hold our breath until this "horrible, scary," union/management-created crisis was over. And then the cost of the vehicles produced...uh, "sticker shock." And the average American family was suppose to be happy supporting workers making twice what they made, and management (including union management very quietly) making obscene salaries. Thank Heaven there is a realignment going on. No more monopoly. Competition is good.
Suffer ye greedy.
Of course! Overstaffed Ford and GM is a part of their financial problems! Haven't you been reading about the "Jobs Banks" articles just run in the Wall Street Journal? and on talk radio?
And workers with health care with NO co-pay!!!
Reality check, dear Cletus. Maybe Ford and GM workers need to get over themselves. They are NOT that important anymore that the whole country gets held hostage when there is a strike at one of those firms. As we were all told to hold our breath until this "horrible, scary," union/management-created crisis was over. And then the cost of the vehicles produced...uh, "sticker shock." And the average American family was suppose to be happy supporting workers making twice what they made, and management (including union management very quietly) making obscene salaries. Thank Heaven there is a realignment going on. No more monopoly. Competition is good.
Suffer ye greedy.
Management continues to make "obscene" salaries, and it's not confined to the automotive industry.
Amen, to that!
Now it would appear that that average American family is supposed to be happy supporting low-wage workers who can't possibly pay enough in taxes to offset all of the services they use so that some business owners don't have to pay a decent wage.
At least one could opt out of buying products from companies that they felt overpaid their workers.
One can't opt out of paying taxes (for the most part).
At least one could opt out of buying products from companies that they felt overpaid their workers.
One can't opt out of paying taxes (for the most part).
While this says nothing about "GM" i will put in my own experience.
I bought a 1989 VW Jetta, built in USA by the UAW. The first year of ownership, i had it in the dealer 5 times to fix everything from leaking windows, a complete leak of all the freon, dead radiator fan, and a messed up idle air stabalizer valve. I drove the car over 225,000 miles, with never any engine or tranny problems, but it was plagued with electrical and minor problems.
I bought a 2001 Mazda 626, built in USA by the UAW and in the first 5 years of ownership i've had it in the dealer a total of ONE time. Squeekie sway bar bushings, replaced under warranty.
My father bought a 2001 Crysler T&C Van, and in it's first 5 yrs of life its been in the dealer twice for warranty work. Not too bad considering it sees pretty constant use. My sister is on her 3rd Caravan, and all have been excellent transporters for her and her kids, and stay hot from constant use of the soccer mom type.
Dad also just bought a 2006 Avalon, and it has to be the finest vehicle he's ever owned. Time will tell, but i would suspect it will have a trouble-free life.
So from my experiences, it seems the UAW are quite capable of building excellent cars. Perhaps the mgmt of various companies and the way they treat their workers needs to be re-thought. I would be willing to bet that the vast majority of the financial "bleeding" in these large automakers is not at the hourly level employee, but rather at the middle and upper mgmt level.
Crysler and Ford have been through rough patches in recent history. Now it's GM's turn, but i suspect they will come around. Perhaps a marraige is in order, much like Crysler/Benz. Time will tell, but i suspect GM will be around for a while to come.
Now whoever designed the AZTEC needs to be fired!
I bought a 1989 VW Jetta, built in USA by the UAW. The first year of ownership, i had it in the dealer 5 times to fix everything from leaking windows, a complete leak of all the freon, dead radiator fan, and a messed up idle air stabalizer valve. I drove the car over 225,000 miles, with never any engine or tranny problems, but it was plagued with electrical and minor problems.
I bought a 2001 Mazda 626, built in USA by the UAW and in the first 5 years of ownership i've had it in the dealer a total of ONE time. Squeekie sway bar bushings, replaced under warranty.
My father bought a 2001 Crysler T&C Van, and in it's first 5 yrs of life its been in the dealer twice for warranty work. Not too bad considering it sees pretty constant use. My sister is on her 3rd Caravan, and all have been excellent transporters for her and her kids, and stay hot from constant use of the soccer mom type.
Dad also just bought a 2006 Avalon, and it has to be the finest vehicle he's ever owned. Time will tell, but i would suspect it will have a trouble-free life.
So from my experiences, it seems the UAW are quite capable of building excellent cars. Perhaps the mgmt of various companies and the way they treat their workers needs to be re-thought. I would be willing to bet that the vast majority of the financial "bleeding" in these large automakers is not at the hourly level employee, but rather at the middle and upper mgmt level.
Crysler and Ford have been through rough patches in recent history. Now it's GM's turn, but i suspect they will come around. Perhaps a marraige is in order, much like Crysler/Benz. Time will tell, but i suspect GM will be around for a while to come.
Now whoever designed the AZTEC needs to be fired!
I don't believe it's a problem with the UAW. I believe it's a problem with management and/or the engineers. As far as the engineers, I will only point out that math and science education achievement and education in this country has long been noted as a problem.
Would it be reasonable to suspect that those problems might be reflected in the sort of engineering that comes out of the "Big Three"?
Here is an excellent article on this very problem:
Extra
GM must get real about its future
An auto industry consultant known for his candor says the best hope for the ailing General is to get smaller -- and get smarter. Here's his take on how to fix GM.
By Peter M. DeLorenzo
Peter M. DeLorenzo is founder and publisher of Autoextremist.com.
Watching GM's stock plunge last week to its largest single-day share loss since the stock market crash in 1987 sent chills through the Motor City, the industry and the financial community. The loss was triggered by GM's announcement that it expected a loss of almost $1 billion -- that's with a "b" -- over the last six months of the year, after suggesting less than three months earlier that things would be tough in 2005, but not in the dire category.
Well, folks, this is seriously dire, and Wall Street reacted accordingly, coming down hard on GM. Danny Hakim, reporting for The New York Times last Thursday morning, said that "The losses reflected an increasingly harsh reality: that General Motors (GM, news, msgs), which three years ago was thought to be the healthiest of the Big Three automakers in Detroit, is now considered the weakest, primarily because it is not selling enough cars at home. The losses also raised questions about the strategy of the company's chairman and chief executive, Rick Wagoner." That's as dire of an assessment as you're likely to hear from anyone about the situation, and now GM heads to the New York Auto Show under the gun and under the microscope.
The fact that GM is in such dire straits right now is shocking to many, but it's not surprising to me. GM has been playing Russian roulette with its incentive-driven marketing strategy for almost 3 1/2 years now. What was a good and patriotic campaign in the beginning to "Keep America Rolling" after the horrific events of 9/11 turned into an obsessive-compulsive addiction that crippled GM's ability to think rationally about the North American market. GM mistook a short-term marketing boost/gambit for a long-term marketing strategy, and they talked themselves into believing that they could actually take away market share from their competitors with it.
It worked for a while, but it also began a debilitating scenario in which GM slowly but surely cheapened their brands across the board, creating a "fire sale" mentality with the public that they're now finding virtually impossible to overcome. Except for the few instances of hit new products, GM has conditioned consumers to consider its product portfolio only when they're in search of a deal. And now that GM is bringing vehicles to market that are actually worth owning on their own merits for a change, they're finding that a growing number of the American driving public couldn't care less.
In short, GM has put itself in a box -- and they're running out of time to put things right.
What was good for GM …
You have to remember that GM was once the New York Yankees of the automobile business. They didn't just win a lot of championships -- they won the championship every year. At the peak of its powers, GM dominated the U.S. automobile industry, consistently capturing more than 40% of the market (think about that figure for a moment in context with today's market, with GM struggling mightily to even maintain a 25% share).
But the problem for GM is that it never moved on from reliving its glory days, and while they were reveling in their legacy, the automotive world irrevocably changed around them. GM's arrogant mindset blinded them to the rapidly changing realities of the North American automotive market.
GM was slow to understand the real impact of the Japanese inroads into this market until it was way too late -- and by then Chevrolet's position in the market as "America's Car" was totally eclipsed by Toyota. GM refused to admit that the luxury car market was fundamentally altered by the German manufacturers -- until its Cadillac division was on the ropes. And GM was painfully slow to realize that the quality/reliability component had become the basic price of entry in the new world order of the auto business.
How to right this sinking ship
After 5 1/2 years of documenting GM's problems in Autoextremist.com the time has come for me to delineate just what GM must do to survive in the future. And survive is the operative word here, because right now GM is in freefall in the U.S. market, and unless there's a dramatic restructuring of the organization -- GM will become a takeover target and will cease to exist as the company we know today.
Here are my key points for righting the listing GM ship:
GM must learn to make money while controlling a 20% share of the market. GM used to be the smug overdog back in the glory days when it controlled over 40% of the market. The problem is that they retained a large measure of their arrogance when their market share fell through the 30s and into the upper 20s. There was even quaint talk a few years ago of regaining the 30% plateau, with Rick Wagoner sporting a "30" lapel pin as a reminder to his troops of his stated goal. Now GM controls a very shaky 25% share of the North American market and that by no means is a solid number. Factor in fleet sales, and the "real" GM market share number is probably closer to 22.5%. And with the imports continuing to make inroads at a terrifying rate, it is not out of line to think that a more rational number for GM to target for its North American operations is a 20% share. If GM restructured its operations based on this assumption, it would be a dramatically different company, but it would have a much better chance of being a competitive factor again.
At 20%, GM right now has too many models, too many divisions, too many nameplates and too many dealers. GM is simply dreaming by continuing to prop up its hoary divisional structure and its bloated dealer body. GM cannot continue acting that the good times will return. Instead, GM must come to the stark realization that they must get smaller to regain their footing in this market, and they must understand that market share increases can slowly grow out of a leaner, meaner superstructure.
For the near term, GM gaining market share is highly unlikely, but a more attractive mix of fewer, more profitable, class-leading products would go along way toward stabilizing GM's fortunes. I am not going to get into specifying all of the models, nameplates and divisions that must be reduced, cut or altered, but just one small example of how GM could act can be demonstrated with the Buick LaCrosse. Some might never miss it. But for the short term, with GM needing to act and act fast with immediate model reductions, the LaCrosse could be reduced from three models to one. I would eliminate the base CX and the middle CXL models, and keep the top-level CXS. Then, I'd cut the price. A real-world price for the CXS shouldn't exceed $26,000 in its present configuration, and at that figure it would be a strong value contender in its segment. Now, take this approach while evaluating GM's entire current and future product programs, and you can just imagine the more focused portfolio you'd end up with.
But if GM is going to take an ax to its product portfolio, then its dealers have to get real about their prospects too. GM cannot conduct itself as an "all things to all people" company at the divisional level any longer. The days when one division could boast a full complement of offerings ended a long time ago, but unfortunately GM and its dealers didn't get that memo until just recently.
You only have to look at the fiasco masquerading as GM's latest minivan entry. How could one company take three years to develop a fourth-place minivan -- and then knowingly distribute it to four of its divisions? Isn't one mediocre minivan plenty? What's wrong with this picture? Did Pontiac dealers need a minivan? Confined within their own little myopic world and selling in a vacuum, yes, you could squint and say that on a good day and with the planets aligned just right, that Pontiac dealers needed a minivan.
But if you step back and take a good look at the competitive set of minivans in the market, and consider GM's hopelessly also-ran position in that particular segment of the market, and also take into account Pontiac's divisional brand identity (at least what's left of it anyway), there is no way in **** that Pontiac should be selling a minivan.
Dealers better ask themselves this basic question: Do they want to have fewer, class-leading products to sell, or do they want to continue to ride the incentive train to oblivion?
Fewer models, fewer nameplates and the biggest automotive advertising budget in the world -- what's not to like? Right now, GM is flailing around trying to adequately promote countless nameplates, while still hammering home the latest GM sales event message -- and that just isn't going to cut it in this market. Cutting GM's swollen product portfolio back would have the immediate benefit of increasing its media throw-weight against the nameplates it retains. More advertising and promotional money for fewer nameplates? Sounds deceptively simple, and remarkably, it is.
Rick Wagoner is not the problem. The people clamoring for CEO Rick Wagoner's head at this point are seriously misguided. The last thing GM needs in the midst of this burgeoning chaos is a regime change, because it would accomplish exactly zero. Make no mistake, Wagoner is a very bright guy, and he has some very capable hands on deck, but realistically, he's under the gun. His measured-paced plan to get GM back on the right track over the last four years has become instantly obsolete -- because they are out of time. The cuts and the restructuring have to come now, not 18 months from now or six months from now, and Wagoner and his team are seriously up against it.
On Tuesday, Wagoner stepped up and bought 50,000 shares of GM stock to the tune of $1.5 million. By doing that, his message is clear: He believes in himself and his team, and he's not going anywhere. Confidence is good in a CEO, but now Rick has to deliver GM from disaster, and the clock is ticking.
It's the product, stupid. If there is one thing I have been consistent about since Day One of this Web site, it's that The Product is, was and always will be King. For a manufacturer to conduct itself with any less of an understanding of this fact is suicide, or at least a ticket to a very bad time, as GM is discovering right now.
For one thing, they're worrying about too many models, nameplates and divisions. They're still operating as if they control a huge chunk of the market and can get away with propping up their now obsolete divisional structure. But GM forgets that out in the real world, the customer doesn't care about GM's latest interpretation of the Sloan model (in which one moves up from a Chevy to a Pontiac to a Buick, etc.). They don't care about segment differentiation or GM's "ladder" view of their product portfolio. The customer just cares about being able to buy good cars and trucks with bulletproof quality and reliability, excellent value and a modicum of style.
GM's new products aren't flying off of the lots because they didn't go far enough with them. In some cases, they're too pricey, and in most cases they're simply just not good enough. With interiors that don't go far enough, engines that aren't feature competitive, and with details that aren't executed with finesse or a sense of style, GM is operating at an overall grade level of "C-" to "B" (excepting their few obvious "A+" examples) in a market that demands an "A" before any serious consideration begins.
I'll give you just one current example. The Chevrolet Equinox is, by any measure, one of GM's few new product hits. It is smartly styled, properly priced and executed very, very well. And miracle of miracles, customers are embracing it without having to be prodded by the Giant Rebate Stick.
Now, let's just imagine for a moment if Toyota had the Equinox: What would they do? They would pour over the Equinox with a fine-toothed comb. They'd improve the details, sweeten the mechanicals, refine the interior and make it better in every single way. Their approach revolves around the concept of gradually improving and refining a vehicle throughout its lifecycle to make it better in every respect and as a result, this is why Toyota is usually successful every time out -- in any segment they compete in. They build brand equity by delivering relentlessly honed products that never disappoint.
What does GM do with the Equinox? Instead of seizing the opportunity of potentially having a rare, long-term product hit (the kind that doesn't come around very often in GM's world), and nurturing it by polishing it to a sheen and solidifying its place in the market with a clever big-buck marketing push -- they do a few improvements to it and then give Pontiac dealers a version called the Torrent.
If there is one vehicle scenario in GM's rapidly dwindling empire that encapsulates everything that is wrong with this company in terms of product development philosophy, business approach and marketing planning, the Equinox/Torrent example is it. Now, multiply that scenario throughout the rest of the corporation, and it's no wonder GM's market share is in freefall.
Comeback: Detroit's idea of a happy ending
Yes, there are a ton of other problems that GM has to deal with. The crushing legacy costs, the nonsensical union contracts, the ridiculous medical care costs, the relentless competition, but in the end, the reason GM finds itself in this position is because of their ingrained recalcitrance and refusal to admit that what worked for the old, dominant, legendary version of GM makes no sense whatsoever in the cutthroat and globally chaotic automotive market that exists today.
Some people in this town cling to the belief that there's a rotation on the Detroit "roller coaster" that seems to follow this sequence -- Ford gets in to trouble, then starts its comeback. Chrysler gets into trouble, stabilizes, and starts its comeback. And now it's just GM's turn in the tank. The problem is that Detroit overall is running out of comebacks. With mounting competitive pressures emanating from the Far East and consumers refusing to give Detroit products the time of day (except for the obvious "hits"), the domestic car industry based here in the Motor City is facing the most serious crisis in its history.
As for GM, they can't continue to operate by just selling to their loyal buyers over and over again, because those buyers will slowly but surely dwindle each year. Until they convince people who don't already drive GM vehicles to seriously consider and actually buy their products, this scenario is not looking promising.
In short, there will be no comeback unless GM gets real about its place in the automotive world. It's no longer a matter of fixing things so that GM can regain its rightful place at the top -- it's a matter of survival, pure and simple.
H. David Roy
Email: mailto:[email protected]
Extra
GM must get real about its future
An auto industry consultant known for his candor says the best hope for the ailing General is to get smaller -- and get smarter. Here's his take on how to fix GM.
By Peter M. DeLorenzo
Peter M. DeLorenzo is founder and publisher of Autoextremist.com.
Watching GM's stock plunge last week to its largest single-day share loss since the stock market crash in 1987 sent chills through the Motor City, the industry and the financial community. The loss was triggered by GM's announcement that it expected a loss of almost $1 billion -- that's with a "b" -- over the last six months of the year, after suggesting less than three months earlier that things would be tough in 2005, but not in the dire category.
Well, folks, this is seriously dire, and Wall Street reacted accordingly, coming down hard on GM. Danny Hakim, reporting for The New York Times last Thursday morning, said that "The losses reflected an increasingly harsh reality: that General Motors (GM, news, msgs), which three years ago was thought to be the healthiest of the Big Three automakers in Detroit, is now considered the weakest, primarily because it is not selling enough cars at home. The losses also raised questions about the strategy of the company's chairman and chief executive, Rick Wagoner." That's as dire of an assessment as you're likely to hear from anyone about the situation, and now GM heads to the New York Auto Show under the gun and under the microscope.
The fact that GM is in such dire straits right now is shocking to many, but it's not surprising to me. GM has been playing Russian roulette with its incentive-driven marketing strategy for almost 3 1/2 years now. What was a good and patriotic campaign in the beginning to "Keep America Rolling" after the horrific events of 9/11 turned into an obsessive-compulsive addiction that crippled GM's ability to think rationally about the North American market. GM mistook a short-term marketing boost/gambit for a long-term marketing strategy, and they talked themselves into believing that they could actually take away market share from their competitors with it.
It worked for a while, but it also began a debilitating scenario in which GM slowly but surely cheapened their brands across the board, creating a "fire sale" mentality with the public that they're now finding virtually impossible to overcome. Except for the few instances of hit new products, GM has conditioned consumers to consider its product portfolio only when they're in search of a deal. And now that GM is bringing vehicles to market that are actually worth owning on their own merits for a change, they're finding that a growing number of the American driving public couldn't care less.
In short, GM has put itself in a box -- and they're running out of time to put things right.
What was good for GM …
You have to remember that GM was once the New York Yankees of the automobile business. They didn't just win a lot of championships -- they won the championship every year. At the peak of its powers, GM dominated the U.S. automobile industry, consistently capturing more than 40% of the market (think about that figure for a moment in context with today's market, with GM struggling mightily to even maintain a 25% share).
But the problem for GM is that it never moved on from reliving its glory days, and while they were reveling in their legacy, the automotive world irrevocably changed around them. GM's arrogant mindset blinded them to the rapidly changing realities of the North American automotive market.
GM was slow to understand the real impact of the Japanese inroads into this market until it was way too late -- and by then Chevrolet's position in the market as "America's Car" was totally eclipsed by Toyota. GM refused to admit that the luxury car market was fundamentally altered by the German manufacturers -- until its Cadillac division was on the ropes. And GM was painfully slow to realize that the quality/reliability component had become the basic price of entry in the new world order of the auto business.
How to right this sinking ship
After 5 1/2 years of documenting GM's problems in Autoextremist.com the time has come for me to delineate just what GM must do to survive in the future. And survive is the operative word here, because right now GM is in freefall in the U.S. market, and unless there's a dramatic restructuring of the organization -- GM will become a takeover target and will cease to exist as the company we know today.
Here are my key points for righting the listing GM ship:
GM must learn to make money while controlling a 20% share of the market. GM used to be the smug overdog back in the glory days when it controlled over 40% of the market. The problem is that they retained a large measure of their arrogance when their market share fell through the 30s and into the upper 20s. There was even quaint talk a few years ago of regaining the 30% plateau, with Rick Wagoner sporting a "30" lapel pin as a reminder to his troops of his stated goal. Now GM controls a very shaky 25% share of the North American market and that by no means is a solid number. Factor in fleet sales, and the "real" GM market share number is probably closer to 22.5%. And with the imports continuing to make inroads at a terrifying rate, it is not out of line to think that a more rational number for GM to target for its North American operations is a 20% share. If GM restructured its operations based on this assumption, it would be a dramatically different company, but it would have a much better chance of being a competitive factor again.
At 20%, GM right now has too many models, too many divisions, too many nameplates and too many dealers. GM is simply dreaming by continuing to prop up its hoary divisional structure and its bloated dealer body. GM cannot continue acting that the good times will return. Instead, GM must come to the stark realization that they must get smaller to regain their footing in this market, and they must understand that market share increases can slowly grow out of a leaner, meaner superstructure.
For the near term, GM gaining market share is highly unlikely, but a more attractive mix of fewer, more profitable, class-leading products would go along way toward stabilizing GM's fortunes. I am not going to get into specifying all of the models, nameplates and divisions that must be reduced, cut or altered, but just one small example of how GM could act can be demonstrated with the Buick LaCrosse. Some might never miss it. But for the short term, with GM needing to act and act fast with immediate model reductions, the LaCrosse could be reduced from three models to one. I would eliminate the base CX and the middle CXL models, and keep the top-level CXS. Then, I'd cut the price. A real-world price for the CXS shouldn't exceed $26,000 in its present configuration, and at that figure it would be a strong value contender in its segment. Now, take this approach while evaluating GM's entire current and future product programs, and you can just imagine the more focused portfolio you'd end up with.
But if GM is going to take an ax to its product portfolio, then its dealers have to get real about their prospects too. GM cannot conduct itself as an "all things to all people" company at the divisional level any longer. The days when one division could boast a full complement of offerings ended a long time ago, but unfortunately GM and its dealers didn't get that memo until just recently.
You only have to look at the fiasco masquerading as GM's latest minivan entry. How could one company take three years to develop a fourth-place minivan -- and then knowingly distribute it to four of its divisions? Isn't one mediocre minivan plenty? What's wrong with this picture? Did Pontiac dealers need a minivan? Confined within their own little myopic world and selling in a vacuum, yes, you could squint and say that on a good day and with the planets aligned just right, that Pontiac dealers needed a minivan.
But if you step back and take a good look at the competitive set of minivans in the market, and consider GM's hopelessly also-ran position in that particular segment of the market, and also take into account Pontiac's divisional brand identity (at least what's left of it anyway), there is no way in **** that Pontiac should be selling a minivan.
Dealers better ask themselves this basic question: Do they want to have fewer, class-leading products to sell, or do they want to continue to ride the incentive train to oblivion?
Fewer models, fewer nameplates and the biggest automotive advertising budget in the world -- what's not to like? Right now, GM is flailing around trying to adequately promote countless nameplates, while still hammering home the latest GM sales event message -- and that just isn't going to cut it in this market. Cutting GM's swollen product portfolio back would have the immediate benefit of increasing its media throw-weight against the nameplates it retains. More advertising and promotional money for fewer nameplates? Sounds deceptively simple, and remarkably, it is.
Rick Wagoner is not the problem. The people clamoring for CEO Rick Wagoner's head at this point are seriously misguided. The last thing GM needs in the midst of this burgeoning chaos is a regime change, because it would accomplish exactly zero. Make no mistake, Wagoner is a very bright guy, and he has some very capable hands on deck, but realistically, he's under the gun. His measured-paced plan to get GM back on the right track over the last four years has become instantly obsolete -- because they are out of time. The cuts and the restructuring have to come now, not 18 months from now or six months from now, and Wagoner and his team are seriously up against it.
On Tuesday, Wagoner stepped up and bought 50,000 shares of GM stock to the tune of $1.5 million. By doing that, his message is clear: He believes in himself and his team, and he's not going anywhere. Confidence is good in a CEO, but now Rick has to deliver GM from disaster, and the clock is ticking.
It's the product, stupid. If there is one thing I have been consistent about since Day One of this Web site, it's that The Product is, was and always will be King. For a manufacturer to conduct itself with any less of an understanding of this fact is suicide, or at least a ticket to a very bad time, as GM is discovering right now.
For one thing, they're worrying about too many models, nameplates and divisions. They're still operating as if they control a huge chunk of the market and can get away with propping up their now obsolete divisional structure. But GM forgets that out in the real world, the customer doesn't care about GM's latest interpretation of the Sloan model (in which one moves up from a Chevy to a Pontiac to a Buick, etc.). They don't care about segment differentiation or GM's "ladder" view of their product portfolio. The customer just cares about being able to buy good cars and trucks with bulletproof quality and reliability, excellent value and a modicum of style.
GM's new products aren't flying off of the lots because they didn't go far enough with them. In some cases, they're too pricey, and in most cases they're simply just not good enough. With interiors that don't go far enough, engines that aren't feature competitive, and with details that aren't executed with finesse or a sense of style, GM is operating at an overall grade level of "C-" to "B" (excepting their few obvious "A+" examples) in a market that demands an "A" before any serious consideration begins.
I'll give you just one current example. The Chevrolet Equinox is, by any measure, one of GM's few new product hits. It is smartly styled, properly priced and executed very, very well. And miracle of miracles, customers are embracing it without having to be prodded by the Giant Rebate Stick.
Now, let's just imagine for a moment if Toyota had the Equinox: What would they do? They would pour over the Equinox with a fine-toothed comb. They'd improve the details, sweeten the mechanicals, refine the interior and make it better in every single way. Their approach revolves around the concept of gradually improving and refining a vehicle throughout its lifecycle to make it better in every respect and as a result, this is why Toyota is usually successful every time out -- in any segment they compete in. They build brand equity by delivering relentlessly honed products that never disappoint.
What does GM do with the Equinox? Instead of seizing the opportunity of potentially having a rare, long-term product hit (the kind that doesn't come around very often in GM's world), and nurturing it by polishing it to a sheen and solidifying its place in the market with a clever big-buck marketing push -- they do a few improvements to it and then give Pontiac dealers a version called the Torrent.
If there is one vehicle scenario in GM's rapidly dwindling empire that encapsulates everything that is wrong with this company in terms of product development philosophy, business approach and marketing planning, the Equinox/Torrent example is it. Now, multiply that scenario throughout the rest of the corporation, and it's no wonder GM's market share is in freefall.
Comeback: Detroit's idea of a happy ending
Yes, there are a ton of other problems that GM has to deal with. The crushing legacy costs, the nonsensical union contracts, the ridiculous medical care costs, the relentless competition, but in the end, the reason GM finds itself in this position is because of their ingrained recalcitrance and refusal to admit that what worked for the old, dominant, legendary version of GM makes no sense whatsoever in the cutthroat and globally chaotic automotive market that exists today.
Some people in this town cling to the belief that there's a rotation on the Detroit "roller coaster" that seems to follow this sequence -- Ford gets in to trouble, then starts its comeback. Chrysler gets into trouble, stabilizes, and starts its comeback. And now it's just GM's turn in the tank. The problem is that Detroit overall is running out of comebacks. With mounting competitive pressures emanating from the Far East and consumers refusing to give Detroit products the time of day (except for the obvious "hits"), the domestic car industry based here in the Motor City is facing the most serious crisis in its history.
As for GM, they can't continue to operate by just selling to their loyal buyers over and over again, because those buyers will slowly but surely dwindle each year. Until they convince people who don't already drive GM vehicles to seriously consider and actually buy their products, this scenario is not looking promising.
In short, there will be no comeback unless GM gets real about its place in the automotive world. It's no longer a matter of fixing things so that GM can regain its rightful place at the top -- it's a matter of survival, pure and simple.
H. David Roy
Email: mailto:[email protected]
Not for Saab they don't.
Good article.... This reminded me of some good friends that are hard-core GM loyalist. They are an upper-income family, 2 parents, 2 boys both in their 30's, both married with kids. They live 60 miles from where they work and make the trip with at least 2 cars once a day.
Needless to say they put thousands of miles on their cars each year. Their cars of choice have always been GM products. They've gone through several mid-range GM sedans, a cadillac esclade, 2 chevy blazers, 1 GMC Jimmy, and a rather nicely loaded buick century. They also had a Jeep Grand Cherokee, but it got totaled, which they took as a bad sign
They also happen to be Korean immigrants and they feel a responsibility to "buy american". I sometimes feel guilty driving up to their house and parking my mazda among all their american cars, and of course being the gracious and hospitable people they are, they have never said a word about it. I console myself by reminding myself that Mazda is partially owned by Ford.
The one brother, closest to my age, is on his second Blazer/Jimmy vehicle, and put well over 200K on his first and his second one is gaining the miles quickly. He's had incredible luck with it, the only problem being the heater blower going out this past winter.
Perhaps it's a sign i'm getting close to 40 yrs old, but i must confess i really enjoy riding in their buick century. Buick seems to be the bright star in the GM line-up.
Needless to say they put thousands of miles on their cars each year. Their cars of choice have always been GM products. They've gone through several mid-range GM sedans, a cadillac esclade, 2 chevy blazers, 1 GMC Jimmy, and a rather nicely loaded buick century. They also had a Jeep Grand Cherokee, but it got totaled, which they took as a bad sign
They also happen to be Korean immigrants and they feel a responsibility to "buy american". I sometimes feel guilty driving up to their house and parking my mazda among all their american cars, and of course being the gracious and hospitable people they are, they have never said a word about it. I console myself by reminding myself that Mazda is partially owned by Ford.
The one brother, closest to my age, is on his second Blazer/Jimmy vehicle, and put well over 200K on his first and his second one is gaining the miles quickly. He's had incredible luck with it, the only problem being the heater blower going out this past winter.
Perhaps it's a sign i'm getting close to 40 yrs old, but i must confess i really enjoy riding in their buick century. Buick seems to be the bright star in the GM line-up.
Saab is outselling Volvo in Europe, according to something I read recently.
Edit: Doesn't it seem like something out of a Dilbert comic to respond to a comment about Saab's lack of dealerships with "Saab is losing money"? (Maybe they wouldn't be if they had more dealerships and sold more cars as a result).
[ March 18, 2006, 05:17 PM: Message edited by: brianl703 ]
Edit: Doesn't it seem like something out of a Dilbert comic to respond to a comment about Saab's lack of dealerships with "Saab is losing money"? (Maybe they wouldn't be if they had more dealerships and sold more cars as a result).
[ March 18, 2006, 05:17 PM: Message edited by: brianl703 ]
Cars that GM makes which are at/near the top of their respective categories:
Cadillac
Corvette
GTO
the new (2007) fullsize trucks SUVs
It makes no sense why GM can't put a corvette type effort into making a class leading HIGH VOLUME CAR.
Ford/GM are in the same boat, with ford arguably having the bigger downside (Toyota/GM have better full size trucks coming).
Cadillac
Corvette
GTO
the new (2007) fullsize trucks SUVs
It makes no sense why GM can't put a corvette type effort into making a class leading HIGH VOLUME CAR.
Ford/GM are in the same boat, with ford arguably having the bigger downside (Toyota/GM have better full size trucks coming).
Originally posted by jbas:
...And the average American family was suppose to be happy supporting workers making twice what they made...
They don't make twice what I make. Maybe you should consider a different career.
...And the average American family was suppose to be happy supporting workers making twice what they made...
They don't make twice what I make. Maybe you should consider a different career.
- Status
