Those in the UAW shops that are threatened would be wise to take the package. It does not take a rocket scientist to tell when the ship is sinking. If the UAW had smart leadership as our Alaska Teamster's 959 they would have seen this coming and made allowances years ago. We did away with paid healthcare for retirees 15 years ago. As a result our pension plan is fully funded and I will get my pension. I have to pay my own healthcare but only a couple more years till I am 65 then just a co-pay. I feel safer going into retirement knowing the plan is fully funded. Squeezing the employers till they file for bankruptcy means they cannot contribute to the plan. As a shop steward I got all the complaints about how the guys could not afford to pay healthcare. Well we are paying it and staying solvent. That's the choice. I took a much smaller package than GM is offering. By retiring early I let some young person have a good job. It was good for me and good for the company. I don't see how someone sitting in a room reading the paper, getting full pay, can sleep at night. That should outrage you as it does me. I could go along with paying someone to train for another job. Not sit in a rubber room and drain the company dry.
They have made Large sums of money with M&A outside their core business.
That's debateable, and the layers of firms and deals that tied into GM-Hughes is so convoluted that it is highly simplistic to speak of it in such glowing terms.
On one hand, the ultimate sale of DirectTV is perhaps one of its best byproducts. That was a project internal to the Hughes management (which worked fairly autonomously in respect to projects such as that), not to the management of Detroit.
Or perhaps you could look at EDS, which earned many of its revenues from sales to...GM. It's debatable whether GM got much mileage out of this relationship.
The Hughes relationship was allegedly supposed to give GM vehicles a technology edge that would help to make them more competitive. While I applaud the effort to take a risk with efforts such as OnStar, it has flopped thus far, and I don't see how else Hughes did much for GM's automaking divisions other than bringing in cash flow that could conceal the extent of their problems.
And then there is the creation of Delphi, which was a spinout of Delco, that had in turn been part of Hughes. We all know what's happening with Delphi, and it would be fair to include it as part of the overall GM-Hughes package if you want to calculate the net benefit or cost of the entire deal.
If you thought that Hughes investors were thrilled to have GM management at the helm, think again. There was at the time a "tracking stock" that gave some stockholders a valuation based upon the Hughes portion of the company, and many of them wanted out. According to a September 2000 article from CNet:
Investors have long been pushing the auto company to sell or spin off its high-tech division into an independent company. But the giant has consistently balked, saying that it sees "synergies" between the auto business and the telecommunications division.
That's infuriated stockholders, who see Hughes as a gold mine being held back by its association with the auto company.
"Investors are anxious for GM to recognize the value of that asset. There has been pressure applied," said Travis Pascavis, an analyst for Morningstar, a mutual fund information service. "But GM has not been willing to give up control."...
..."Hughes operates pretty free of GM," said Saul Rubin, a financial analyst with Warburg Dillon Read. "That's one of the reasons that investors want it to be (literally) free of GM."
Perhaps the worst thing about it is that Hughes gave GM an opportunity to both conceal the true extent of its problems on the vehicle side of the business, and provided a distraction that kept GM from getting the automaking side of the house in order.
But either way, it really doesn't tell you much about the talents of GM's management, because as noted above, the Detroit crowd had very little involvement in the day-to-day business of the Hughes side of the house. Detroit's greatest contribution to the partnership/ merger seems to have been to dilute the value of the Hughes portion of the company.
Perhaps you should credit GM for having the good sense to largely leave Hughes alone. But even if you take the glass-half-full approach, current management has no one to whom to pawn off the responsibility for running what little that is left. Who is available within GM today to provide bona fide leadership needed to craft a turnaround?
If everyone took your stance, GM, Ford and Chrysler would be well on their way to automotive dominance in this country. You have to look at the long term. Give a little now so the company is there to give back later. I remember back in the day when the company gave a fair wage for a fair days work and you didn't get a guarantee that the company would be there for you in your golden years, but you knew deep down that they would. These days it is all about bleeding the companies dry for the short term gain. I have spent 40+ years seeing only the bad in unions, but in 20 sentences, I see that there is intelligent life in your organization. My hats off to you. People, if you have to give up a latte a day so your kids can enjoy a chevy as much as you do, by god you need to do it.
ok hotshot, the GTO is a failure. While waiting for my new truck I was chatting with an employee at the dealership and was told the GTO is a failure and GM is pulling the plug. Of course it has low incentives since it's a "halo" car and isn't meant to have the profit margin of a Yukon. GM doesn't really make much money on it regardless. If you honestly think that the success or failure of a model depends on level of incentives(if any) then maybe you need to change your online name.
If everyone took your stance, GM, Ford and Chrysler would be well on their way to automotive dominance in this country.
To dominate any industry, you have to sell products that people want, and have an ability to fend off rivals. When consumers go to a showroom, they are there to buy a vehicle, not a labor contract or a lack thereof.
I'm still not seeing any evidence whatsoever that people are going to run out to buy Cobalts if the union was dissolved, or that Cobalts would be better cars if there wasn't a union. You could build them with Chinese labor on an automated line, and I doubt that you'd end up with one more sale than you would have had otherwise. If the product is not desirable, it's not going to matter who built it.
Now I see why you are so anti-union. Of course you would have hatred for unionized labor. I think we all understand this and now might be time to move on to other GM problems because now all you union haters are just repeating yourselves.
Of course, the GTO failed, this is a no-brainer. Not only did sales not meet management's expectations (which explains the huge pile of excess inventories that will take months to sell off, even after production was cut), but the "halo" didn't help to build equity for the Pontiac badge.
I could understand deliberately selling GTO's at a loss if it helped to build prestige for Pontiac or GM, profits didn't necessarily need to be a priority for this car, if it could achieve other benefits. (If a loss leader price generated positive buzz for the badge, I'd chock up the loss to a much-needed marketing/promotion expense.) But obviously, that didn't happen, so I fail to see what GM got out of this mistake aside from the usual egg-on-face.
What some fail to realize is that the real benefit of cars such as the 300 was to give Chrysler some seriously needed street cred. The 300 was enough of an image builder that it will help Daimler to sell more Chryslers in the future, and will likely pull buyers into Chrysler showrooms to buy other vehicles that will benefit from the buzz that this car generated. (For a time, average inventories were at about 25 days, levels comparable to BMW and Lexus.)
To dominate any industry, you have to sell products that people want, and have an ability to fend off rivals. When consumers go to a showroom, they are there to buy a vehicle, not a labor contract or a lack thereof.
I'm still not seeing any evidence whatsoever that people are going to run out to buy Cobalts if the union was dissolved, or that Cobalts would be better cars if there wasn't a union. You could build them with Chinese labor on an automated line, and I doubt that you'd end up with one more sale than you would have had otherwise. If the product is not desirable, it's not going to matter who built it.
The point was that if the unions took a reasonable pay and would make concessions so that the company had funds available to actually design and build quality cars, the Cobalts WOULD be the quality that people want to buy. When the unions bring the company to it's knees and force it to cut corners in order to meet the payroll, junk is pushed off the assembly line. Something has to take a hit if the payroll rises. The employees will walk if not paid. The credit companies will stop lending if the bills aren't paid. But, there will always be rental companies that will buy junk if the price is right, so the quality of the product suffers. But, I guess the bottom line is that the final product is a direct reflection of the person building it.
The point was that if the unions took a reasonable pay and would make concessions so that the company had funds available to actually design and build quality cars, the Cobalts WOULD be the quality that people want to buy.
I understood the point, but it is a fallacious one.
There's simply no evidence to support that position, you're merely speculating that GM will step up to the plate. You're pulling that out of thin air (or if we want to put a positive take on it, engaging in some severe wishful thinking), but where are the indications that this is true?
Look at the GM lineup, and you see that its non-UAW products are generally some of their most unsuccessful. (I'm not giving credit to the UAW for the few winners being winners, but clearly, GM management is more than capable of screwing up on their own without the UAW.) Give GM management money to play with, and you end up with an unsold pile of Saab 9-2X's and SUV's as a business strategy while oil sells for $65 per barrel.
GM has spent decades building cars that only a fleet buyer could like, irrespective of whether times were good or times were bad, or whether they were cash rich or cash poor. The Cavalier was built during a time of record profits, when cash could have used for a whole host of projects. Why weren't those profits reinvested into creating a better more competitive car that would curry favor with the consumer, rather than use this car as a means to destroy the value of the Chevy badge? (I'm sure that there was some excuse made then, just as excuses are being made now. Always an excuse, never a result.)
There's simply no evidence to support that position, you're merely speculating that GM will step up to the plate. You're pulling that out of thin air (or if we want to put a positive take on it, engaging in some severe wishful thinking), but where are the indications that this is true
I just gave you a few examples. Give GM management record profits and buckets of cash, and why do they do with it?
-Buy Saab, which made no money before and hasn't made any since
-Do a deal with FIAT, lose $4.4 billion in four years when simpler alternatives could have been negotiated, instead
-Keep building the same old Cavalier, which only helped to drive Americans to "imports" that have turned millions of Americans into Toyota and Honda buyers for life. (You would have thought that GM management was working on Toyota's payroll for that to have happened.)
Where are the products that indicate that GM management has been forward-thinking and ahead of the curve? (Hint: When your sales are falling, in spite of having lower prices, while your competitors are getting stronger, you just might be doing something wrong...)
Where are the products that indicate that GM management has been forward-thinking and ahead of the curve?
Europe, unfortunately.
I still think (hope) if GM could relieve themselves of some of the labor costs, they'd plow it into vehicle development. With shortsighted shareholders, that may not be true.
I still think (hope) if GM could relieve themselves of some of the labor costs, they'd plow it into vehicle development. With shortsighted shareholders, that may not be true.
I don't think that GM shareholders instructed management to make sure that the Impala was as bland as possible, or to buy struggling foreign automakers that couldn't add value to the GM product lineup. GM management made those mistakes on their own quite nicely.
We're back to the excess nameplate problem. Instead of building numerous mediocre cars under an assortment of badges, why not build a few distinctly great ones that win back the hearts and minds of the American consumer, i.e. the consumers to whom GM sells about half of its total vehicle output?
As has been proven by automakers who have succeeded in the US, all you need is a few home run products to put you back on the map. Notice that the failed ones (Peugeot, FIAT, Daihatsu, Renault, etc.) never managed to build a definitive category killer that would create brand equity for them, while those that succeeded (Toyota, Datsun/Nissan, Honda, VW) all developed a product or two that put them on the map.
And along the way, VW provides a good case study of what happens when you abuse and neglect your badge equity once you've built it up, because the American consumer will not be very forgiving of serious mistakes, even for brands that they used to like. It is essential to continually improve, not just make the occasional move forward that is offset by more steps backward.
Ever think about that ? You can have a great product at a reasonable price and the public perception might NEVER support its' success. Why? It may be timing. Or simply because you have been indoctrinated that one is better than the other. That taints your evaluation of EVERYTHING about the product. JAPANESE auto industry has been developing an ADVERTISING direction that uses this understanding of the human animal. Realize you can really look good if you emphasize the shortcomings of your competition. If you are subtle, you do a good job by "damning it with faint praise'. You are accomplishing your goal. We were sitting on our smug laurels of market share for better than 5 decades. They have slowly but methodically improved their products while we were complacent. We have dramatically improved. Did it help the perception? It became the accepted fashion to demean,ridicule and trivialize any improvements in the domestic industry. Ever read car and driver,consumers report or international motoring ? One would think that the American producer is akin to the abilities of a 18th Century blacksmith or a shoe repairman in a techno-world.
Economics and business strategy be damned ! If you don't "Believe" it is a good value it never will be. Facts are irrelevant.
So now we're back to blaming the consumer and the media again.
The perception is fully justified. Any "manager" who doesn't understand that respect must be earned by creating quality product or service and by meeting the desires of the customer needs to be pink-slipped.
I'll bet that GM has had more than its share of people with this blame-everyone-but-ourselves mentality. No wonder the cars and consumers have both suffered as they have.
If you had another profession, perhaps a surgeon ,your claim to fame would be a brilliant learned surgical technique. Unfortunately, NONE of your patients would survive your methodology. What would be the public's perception then......?
You will not be able to apply what you espouse and have GM Survive. Maybe that is your goal. You have never made that clear ! It may not be an issue to you but it IS this readers' perception. None of the suggestions you have made to date can be made work in the context of a "real world business scenario". Limitations are part of the equation ! You chose to make your own rules for convenience . If you are an academician.. stay there ! You would not survive in a corporate world.
You will not be able to apply what you espouse and have someone like GM Survive.
What I'm "espousing" is precisely the same strategy that other automakers have used to succeed in the US market.
No company that wants to blame the consumer is going to last for very long. It is precisely your blame-the-customer ethic that has led to the problems that GM has today. Look in the mirror -- the enemy isn't Consumer Reports or Road & Track, but you.
Yup it is a liberal conspiricy alright. I tell ya those da gone media wants to kill GM ya know kill em'. Now where are ma da gon' suspenders. Time to drive my Chevy to the Levy
It is funny; Nissan was in the same boat as GM a few years back and just look how quickly they have turned things around. Mr. Bankruptcy Man aka. Rick Wagoneer doesn't really have much of a clue as to how to turn GM's finance's around. You are right, SOCALA, cutting jobs and production is not gonna increase your market share or improve your quality. But it seems GM has put all its egg in the big SUV PU truck market and have completely given up on the minivan and midsize car market. With gas prices near 3 bucks and going up, only and idiotic company like GM could bet all its chip on the truck and SUV market.
Just the American auto industry? Shoot, since that late 1960s, it's became the accepted fashion to demean, ridicule and trivialize anything good about America!!!
To change you FIRST have to have the strategy for change. THEN you must be allowed to DO IT ! You obviously never have worked with "lockstep" contracts. Why n'hell do the JAPANESE avoid unionization like the plague ? So they can change as the market forces demand !
It is funny; Nissan was in the same boat as GM a few years back and just look how quickly they have turned things around.
That's actually a great example. When Nissan really was on the skids, Ghosn's emphasis was on (a) increasing sales, (b) developing a few killer products (new Altima, 350Z, Micra, G35), and (c) providing a clear vision of leadership that could rally the troops, within the context of (d) a quick turnaround plan to capitalize on momementum created through leadership.
We can see from the data that I provided earlier that Nissan's per-vehicle operating expenses on its automaking lines actually exceed GM's by a wide margin. Nonetheless, Ghosn turned Nissan around in just two years. Any reason that Wagoner shouldn't do the same?
To just say and THEN address what you CAN do are world's apart !
The math makes the solution obvious -- GM needs to sell its cars at higher prices, and the losses turn to profit. Cost cuts would be nice, of course, but cost cuts in the absence of price increases don't eliminate those losses, nor do they create the foundation for long-term profit.
But for those prices to be raised, the cars need to become worth buying at those higher prices. If Nissan can develop an Altima that can climb into the top ten with few fleet sales that can rescue the company, why can't GM do the same?
Have you actually read any of socalas posts? He's explained and demonstrated his ideas on how to improve GM. Apparently you didn't want to read that far back. Go back a few pages and if you need help sounding out SOME of the BIGGER words then I'd BE HAPPY to HELP YOU!It's OKAY! WE can't ALL be smart!
Now tell me again. Since you are not of this world what planet and constellation are you from ? Now this may come as a surprise but math does not ALWAYS provide the results when you are NOT allowed to calculate !
Idealistic? This is precisely what Ghosn already did at Nissan, and is currently doing at Renault. It is what Hyundai is doing right now as we speak. It's what Mazda did in the 70's when it was on the brink of failure and a complete US withdrawal. It's what VW did with the New Beetle (until quality problems and the overblown Phaeton took away from its other successes.)
US labor unions are pussycats compared to what you find in France, yet Ghosn is working on turning Renault without any job cuts. His philosophy: Rather than creating a pissing contest with the union, make better cars that can be sold in large enough numbers to pay the workers.
What a refreshing philosophy: Make money by selling products that people want. Too bad that medicine can't be put into an IV and injected into the bloodstream by force, as it's pretty obvious that the pro-Detroit would never drink it willingly.
I agree. Socals posts are strongly critical of GM, however, it is well deserved. I suspect he fears the ripple effect of a GM bankruptcy as much as I or a Detroit line worker in the UAW. However, GM has done nothing to avert bankruptcy. Smaller cars are the wave of the future. All progressive autobuilders are releasing new small car models (Toyota Yaris, Honda Fit, Nissan Versa or whatever its called). GM still outsources their one mediocre entry in this market and it gets 20 % lower fuel economy than an equivalent sized and powered Honda or Toyota. GM's been making engines for nearly 100 years and GM management is telling me they can't make a fuel efficient four cylinder or they feel that the profit margin isn't there. Their current game plan screams to me that they want bankruptcy to dissolve the union and then reorganize to focus in on highly profitable specialty vehicles (i.e. Cadillac, Corvette, etc). Unfortunately, that conflicts with the country's ideal of keeping GM around as an institution to provide decent jobs and a tax base to the wastrils in all levels of government. The next year or two should be an interesting social experiment as GM's losses start piling up.
I find it interesting that George35 accuses people of not being able to survive in the corporate world. Apparently neither can GM, yet he defends GM and blames their troubles on the unsuspecting foolhardy public and the media? :sick: Can't really get with you my man, I'm sure your a smart fella and all but you are reaching IMO.
His points about Nissan/Renault weren't neccessarily genious, but were obvious to anyone with some brains or a willingness to look at other car company's. Socala pointed out Chrysler's situation as further proof. I suppose we need someone like Socala, to become CEO of GM. Seriously it's obvious to some what needs to be done. Good Product and good marketing can turn a bad situation with loss, into a postive and profitable one.
Why are there only a few of us that can see this ? :confuse:
The statements are to reinforce (not scapegoat) an awareness of one of the factors beyond those of the numbers (math). The aspects of perceived opinion drive the purchasing outcome to a much larger degree than I believe most are willing to admit. But that is only one small factor. It is not simply an issue of what needs to be done. Rick (contrary to opinions of others) is well aware of that.
And yes, dealing with a corporate culture can make you a managerial eunuch regardless of your high ideals. I have seen it stagnate talents,intellects and egos far greater than SoCala4- Hence the comment on survivability. GM is changing (for the better) to a degree that will amaze given it size. Slowly to many but quite rapidly if you have seen the last three decades.
To change in tune with the suggestions made you would have to start with a Clean Sheet. Management, Labor,Engineering and Marketing would have to be changed radically. You could not afford the time for the corporation to go thru a metamorphosis. The scale reductions are one part of that process. I am speaking of brands Volumes and manufacturing cost. Perhaps BK is the only way to address this change. But then there is a human cost.
Do Socala4 statements appear to be some sort of revelation to the readers of this forum ? God, I hope not. These subjects were know over 30 years ago. The impetus for change was obviously market share and legacy costs. The transition required and mandated by some of the posters could not happen as quickly due to labor demands. But I would venture to guess it will happen faster than any economic futurist will imagine. SoCala4, since you feel so strongly in your position I might make a suggestion. PLEASE ,go to a shareholders meeting and pose your obvious solutions to Wagoner. Who knows it might get their attention. When you tell them how to do it you have to acknowledge your inability to influence anything. I may be wrong but maybe it will generate an an offer as a strategic consultant for YORK. ............NAW !!!!
The aspects of perceived opinion drive the purchasing outcome to a much larger degree than I believe most are willing to admit.
You seem to be under the impression that negative consumer attitudes toward GM products appeared magically out of thin air, or that they've been influenced by some media conspiracy.
In reality, American consumers have had negative experiences with these products, and have had better experiences with those of the competitors. People are defecting from Chevy to Honda, not the other way around. It should be obvious that this isn't due to black magic, voodoo dolls, or hypnosis, but because the competitors field better products.
PLEASE ,go to a shareholders meeting and pose the obvious solutions to Wagoner.
That would be a bit like trying to talk sense with Mussolini about the problems with fascism -- he won't listen. No point in listening, when he has the lackeys serving him the Kool Aid, assuring him that everything is just fine the way things are now. To change in tune with the aforementioned suggestions you would have to start with a Clean Sheet. Management, Labor,Engineering and Marketing would have to be changed radically.
Now we're getting somewhere. A GM turnaround will require radical surgery, this isn't just a minor face lift.
The current business model simply doesn't work. You might have an emotional investment in the company continuing to fail using the same old failed methods and structures, but I don't.
At its current pace, there won't be a company left to save. Once GMAC has been sold off, GM will have no choice but to make money from automaking, and I have to wonder whether they'll be able to do it, barring some radical decline in fuel prices. (Did anyone notice that oil hit $71 per barrel today?)
Im wondering if anyone on here can help me find and tell me where on this website I can input the VIN number so that I get some proof of anti lock breaks?
You had to look up all that fancy talk,did'n ya georgie? I'd say socala has at least a few purdy good ideas. You don't but seem to think ya do. Thats okay georgie. When GM collapses from the management of those incompetant butt-kissers you can move in and tell'em what ta do! :mad:
I'm not trying to be a smart-[non-permissible content removed](for once)but huh?If you mean anti lock brakes what proof do you need?Proof of what? :confuse:
I suspect he fears the ripple effect of a GM bankruptcy as much as I or a Detroit line worker in the UAW. However, GM has done nothing to avert bankruptcy.
Well, I'll differ with you there -- I think that BK would actually be a good step for GM...IF they used the opportunity that comes from it to improve the products, and to rationalize the product line and the distribution channels. But seeing that GM management only understands cost reduction, rather than market building, I suspect that BK won't do GM any good. Just as they failed to invest the company's money wisely when it was profitable, I seriously doubt that this will lead to better products.
GM's been making engines or nearly 100 years and GM management is telling me they can't make a fuel efficient four cylinder or they feel that the profit margin isn't there.
Given the success that others have had selling these types of products to American consumers, this is obviously a lie. If there wasn't a market for these cars, then why are the Civic and Corolla consistent top sellers in the passenger car category?
Their current game plan screams to me that they want bankruptcy to dissolve the union and then reorganize to focus in on highly profitable specialty vehicles (i.e. Cadillac, Corvette, etc).
I agree, but unfortunately, this high-value niche-vehicle strategy is not likely to work. I suspect that GM wants to become the BMW of trucks, when Toyota will probably soon be doing a better job of capturing that market. GM management types need to realize that much of their advantage in trucks has been due to barriers that have kept out competitors, not because of their products, and that its rivals will be making a concerted effort to knock GM out of its top slot. (Despite the rhetoric, I'm sure that Toyota would love to dethrone GM, and will target some segments specifically to make sure that happens.
Condescension is not attractive on this forum. For one that is learned in things such as solar eclipse and Egytology I would think you could dig deeper for a more lucid response, when you disagree with other posters.
I personally think that George35 has a more realistic view of the situation at GM. I am not saying that Socala does not have valid concerns. I have to go on record saying that the outcome at Ford & GM will not improve until a major shakeup in the UAW contracts is completed. The UAW has a better chance of salvaging some of their gains by not forcing GM into Chapter 11.
I don't know why so much talk of PU trucks and SUVs being dead. They may take a little hit each time the gas goes to another plateau. They are very popular and from where I sit I don't see people getting out of their F150s and into a Civic. It is the only thing that is keeping Ford & GM from immediate collapse.
I guess I am backward I switched from Toyota, Datsun, Honda & Subaru in the 1960s & 70s to Chevy PU trucks in the 1980s and have never considered going back. GM is not doing everything wrong. I would like to thank the UAW employees of Indiana for my 2005 GMC PU that I like very much.
Just as they failed to invest the company's money wisely when it was profitable, I seriously doubt that this will lead to better products.
I agree that money made during the greedy 1990s was not always used wisely. It was a time when corporate leaders went from less than 100 times average employee earnings, to almost 600 times average employee earnings. Corporate greed brought down several giants during that time and some had deep enough pockets to survive into the 21st century. Huge CEO benefit packages are obscene to most of us. They are border line criminal when the company is not making profits that can justify those packages.
Violet20342: Not sure there is anywhere you can input the VIN and find out if you have ABS. The best thing to do is take a look at the "used car" forum and look up your car. There you can see the "standard" features.
What kind of car do you have? Maybe the moderator can direct you to the right place.
"I don't know why so much talk of PU trucks and SUVs being dead. They may take a little hit each time the gas goes to another plateau. They are very popular and from where I sit I don't see people getting out of their F150s and into a Civic. It is the only thing that is keeping Ford & GM from immediate collapse."
The sales of SUVs are down across the board and pickups have leveled off. With gas prices hovering around $3, people aren't too eager to drive vehicles that get only 18 mpg on the highway. But you are correct, that their PU and SUV sales are keeping them afloat.
Right now GM (and to some degree Ford) are a half step behind the competittion, this is mainly due to the profits loss. Their development timeline is greater than Japan and Korea and even Germany. Gas prices are up to $3 a gallon and they are releasing the Tahoe instead of a hybrid or an attractive economy car. They released 4 minivans two years and they were already behind the leaders in innovation, performance and quality.
Here are a few of my suggestions. They need to eliminate Saturn since it only competes with Chevy and not the imports. Currently, there is no product in Saturns lineup that competes well outside of GM. Let your designers produce the vehicles and not the accountants. Stop squeezing your suppliers to lower their profits. It produces poor components. Aren't you sick of replacing the same parts in different model vehicles? Finally, eliminate the rebates. By offering $2k and $3k rebates, you are simply admitting that your vehicles are not as good as the competition and lowering your profits.
I hope GM does not have to go BK. That move hurts the local economy. But any other plan, will take time which I'm not sure GM has.
Comments
That's debateable, and the layers of firms and deals that tied into GM-Hughes is so convoluted that it is highly simplistic to speak of it in such glowing terms.
On one hand, the ultimate sale of DirectTV is perhaps one of its best byproducts. That was a project internal to the Hughes management (which worked fairly autonomously in respect to projects such as that), not to the management of Detroit.
Or perhaps you could look at EDS, which earned many of its revenues from sales to...GM. It's debatable whether GM got much mileage out of this relationship.
The Hughes relationship was allegedly supposed to give GM vehicles a technology edge that would help to make them more competitive. While I applaud the effort to take a risk with efforts such as OnStar, it has flopped thus far, and I don't see how else Hughes did much for GM's automaking divisions other than bringing in cash flow that could conceal the extent of their problems.
And then there is the creation of Delphi, which was a spinout of Delco, that had in turn been part of Hughes. We all know what's happening with Delphi, and it would be fair to include it as part of the overall GM-Hughes package if you want to calculate the net benefit or cost of the entire deal.
If you thought that Hughes investors were thrilled to have GM management at the helm, think again. There was at the time a "tracking stock" that gave some stockholders a valuation based upon the Hughes portion of the company, and many of them wanted out. According to a September 2000 article from CNet:
Investors have long been pushing the auto company to sell or spin off its high-tech division into an independent company. But the giant has consistently balked, saying that it sees "synergies" between the auto business and the telecommunications division.
That's infuriated stockholders, who see Hughes as a gold mine being held back by its association with the auto company.
"Investors are anxious for GM to recognize the value of that asset. There has been pressure applied," said Travis Pascavis, an analyst for Morningstar, a mutual fund information service. "But GM has not been willing to give up control."...
..."Hughes operates pretty free of GM," said Saul Rubin, a financial analyst with Warburg Dillon Read. "That's one of the reasons that investors want it to be (literally) free of GM."
Perhaps the worst thing about it is that Hughes gave GM an opportunity to both conceal the true extent of its problems on the vehicle side of the business, and provided a distraction that kept GM from getting the automaking side of the house in order.
But either way, it really doesn't tell you much about the talents of GM's management, because as noted above, the Detroit crowd had very little involvement in the day-to-day business of the Hughes side of the house. Detroit's greatest contribution to the partnership/ merger seems to have been to dilute the value of the Hughes portion of the company.
Perhaps you should credit GM for having the good sense to largely leave Hughes alone. But even if you take the glass-half-full approach, current management has no one to whom to pawn off the responsibility for running what little that is left. Who is available within GM today to provide bona fide leadership needed to craft a turnaround?
Turboshadow
To dominate any industry, you have to sell products that people want, and have an ability to fend off rivals. When consumers go to a showroom, they are there to buy a vehicle, not a labor contract or a lack thereof.
I'm still not seeing any evidence whatsoever that people are going to run out to buy Cobalts if the union was dissolved, or that Cobalts would be better cars if there wasn't a union. You could build them with Chinese labor on an automated line, and I doubt that you'd end up with one more sale than you would have had otherwise. If the product is not desirable, it's not going to matter who built it.
I could understand deliberately selling GTO's at a loss if it helped to build prestige for Pontiac or GM, profits didn't necessarily need to be a priority for this car, if it could achieve other benefits. (If a loss leader price generated positive buzz for the badge, I'd chock up the loss to a much-needed marketing/promotion expense.) But obviously, that didn't happen, so I fail to see what GM got out of this mistake aside from the usual egg-on-face.
What some fail to realize is that the real benefit of cars such as the 300 was to give Chrysler some seriously needed street cred. The 300 was enough of an image builder that it will help Daimler to sell more Chryslers in the future, and will likely pull buyers into Chrysler showrooms to buy other vehicles that will benefit from the buzz that this car generated. (For a time, average inventories were at about 25 days, levels comparable to BMW and Lexus.)
I'm still not seeing any evidence whatsoever that people are going to run out to buy Cobalts if the union was dissolved, or that Cobalts would be better cars if there wasn't a union. You could build them with Chinese labor on an automated line, and I doubt that you'd end up with one more sale than you would have had otherwise. If the product is not desirable, it's not going to matter who built it.
The point was that if the unions took a reasonable pay and would make concessions so that the company had funds available to actually design and build quality cars, the Cobalts WOULD be the quality that people want to buy. When the unions bring the company to it's knees and force it to cut corners in order to meet the payroll, junk is pushed off the assembly line. Something has to take a hit if the payroll rises. The employees will walk if not paid. The credit companies will stop lending if the bills aren't paid. But, there will always be rental companies that will buy junk if the price is right, so the quality of the product suffers. But, I guess the bottom line is that the final product is a direct reflection of the person building it.
I understood the point, but it is a fallacious one.
There's simply no evidence to support that position, you're merely speculating that GM will step up to the plate. You're pulling that out of thin air (or if we want to put a positive take on it, engaging in some severe wishful thinking), but where are the indications that this is true?
Look at the GM lineup, and you see that its non-UAW products are generally some of their most unsuccessful. (I'm not giving credit to the UAW for the few winners being winners, but clearly, GM management is more than capable of screwing up on their own without the UAW.) Give GM management money to play with, and you end up with an unsold pile of Saab 9-2X's and SUV's as a business strategy while oil sells for $65 per barrel.
GM has spent decades building cars that only a fleet buyer could like, irrespective of whether times were good or times were bad, or whether they were cash rich or cash poor. The Cavalier was built during a time of record profits, when cash could have used for a whole host of projects. Why weren't those profits reinvested into creating a better more competitive car that would curry favor with the consumer, rather than use this car as a means to destroy the value of the Chevy badge? (I'm sure that there was some excuse made then, just as excuses are being made now. Always an excuse, never a result.)
Where are the indications that it isn't?
I just gave you a few examples. Give GM management record profits and buckets of cash, and why do they do with it?
-Buy Saab, which made no money before and hasn't made any since
-Do a deal with FIAT, lose $4.4 billion in four years when simpler alternatives could have been negotiated, instead
-Keep building the same old Cavalier, which only helped to drive Americans to "imports" that have turned millions of Americans into Toyota and Honda buyers for life. (You would have thought that GM management was working on Toyota's payroll for that to have happened.)
Where are the products that indicate that GM management has been forward-thinking and ahead of the curve? (Hint: When your sales are falling, in spite of having lower prices, while your competitors are getting stronger, you just might be doing something wrong...)
Europe, unfortunately.
I still think (hope) if GM could relieve themselves of some of the labor costs, they'd plow it into vehicle development. With shortsighted shareholders, that may not be true.
I don't think that GM shareholders instructed management to make sure that the Impala was as bland as possible, or to buy struggling foreign automakers that couldn't add value to the GM product lineup. GM management made those mistakes on their own quite nicely.
We're back to the excess nameplate problem. Instead of building numerous mediocre cars under an assortment of badges, why not build a few distinctly great ones that win back the hearts and minds of the American consumer, i.e. the consumers to whom GM sells about half of its total vehicle output?
As has been proven by automakers who have succeeded in the US, all you need is a few home run products to put you back on the map. Notice that the failed ones (Peugeot, FIAT, Daihatsu, Renault, etc.) never managed to build a definitive category killer that would create brand equity for them, while those that succeeded (Toyota, Datsun/Nissan, Honda, VW) all developed a product or two that put them on the map.
And along the way, VW provides a good case study of what happens when you abuse and neglect your badge equity once you've built it up, because the American consumer will not be very forgiving of serious mistakes, even for brands that they used to like. It is essential to continually improve, not just make the occasional move forward that is offset by more steps backward.
We have dramatically improved. Did it help the perception? It became the accepted fashion to demean,ridicule and trivialize any improvements in the domestic industry. Ever read car and driver,consumers report or international motoring ? One would think that the American producer is akin to the abilities of a 18th Century blacksmith or a shoe repairman in a techno-world.
Economics and business strategy be damned ! If you don't
"Believe" it is a good value it never will be. Facts are irrelevant.
The perception is fully justified. Any "manager" who doesn't understand that respect must be earned by creating quality product or service and by meeting the desires of the customer needs to be pink-slipped.
I'll bet that GM has had more than its share of people with this blame-everyone-but-ourselves mentality. No wonder the cars and consumers have both suffered as they have.
You will not be able to apply what you espouse and have GM Survive. Maybe that is your goal. You have never made that clear !
It may not be an issue to you but it IS this readers' perception. None of the suggestions you have made to date can be made work in the context of a "real world business scenario". Limitations are part of the equation ! You chose to make your own rules for convenience .
If you are an academician.. stay there ! You would not survive in a corporate world.
What I'm "espousing" is precisely the same strategy that other automakers have used to succeed in the US market.
No company that wants to blame the consumer is going to last for very long. It is precisely your blame-the-customer ethic that has led to the problems that GM has today. Look in the mirror -- the enemy isn't Consumer Reports or Road & Track, but you.
THEN you must be allowed to DO IT ! You obviously never have worked with "lockstep" contracts. Why n'hell do the JAPANESE avoid unionization like the plague ? So they can change as the market forces demand !
You haven't yet been able able to deal with the limitations. To just say and THEN address what you CAN do are world's apart !
That's actually a great example. When Nissan really was on the skids, Ghosn's emphasis was on (a) increasing sales, (b) developing a few killer products (new Altima, 350Z, Micra, G35), and (c) providing a clear vision of leadership that could rally the troops, within the context of (d) a quick turnaround plan to capitalize on momementum created through leadership.
We can see from the data that I provided earlier that Nissan's per-vehicle operating expenses on its automaking lines actually exceed GM's by a wide margin. Nonetheless, Ghosn turned Nissan around in just two years. Any reason that Wagoner shouldn't do the same?
The math makes the solution obvious -- GM needs to sell its cars at higher prices, and the losses turn to profit. Cost cuts would be nice, of course, but cost cuts in the absence of price increases don't eliminate those losses, nor do they create the foundation for long-term profit.
But for those prices to be raised, the cars need to become worth buying at those higher prices. If Nissan can develop an Altima that can climb into the top ten with few fleet sales that can rescue the company, why can't GM do the same?
Go back a few pages and if you need help sounding out SOME of the BIGGER words then I'd BE HAPPY to HELP YOU!It's OKAY! WE can't ALL be smart!
Now tell me again. Since you are not of this world what planet and constellation are you from ? Now this may come as a surprise but math does not ALWAYS provide the results when you are NOT allowed to calculate !
US labor unions are pussycats compared to what you find in France, yet Ghosn is working on turning Renault without any job cuts. His philosophy: Rather than creating a pissing contest with the union, make better cars that can be sold in large enough numbers to pay the workers.
What a refreshing philosophy: Make money by selling products that people want. Too bad that medicine can't be put into an IV and injected into the bloodstream by force, as it's pretty obvious that the pro-Detroit would never drink it willingly.
Really ? Thank you but I will decline. Your "knowledgeable assistance' would be the consummate oxymoron !
Can't really get with you my man, I'm sure your a smart fella and all but you are reaching IMO.
Seriously it's obvious to some what needs to be done. Good Product and good marketing can turn a bad situation with loss, into a postive and profitable one.
Why are there only a few of us that can see this ? :confuse:
Rocky
And yes, dealing with a corporate culture can make you a managerial eunuch regardless of your high ideals. I have seen it stagnate talents,intellects and egos far greater than SoCala4- Hence the comment on survivability. GM is changing (for the better) to a degree that will amaze given it size. Slowly to many but quite rapidly if you have seen the last three decades.
To change in tune with the suggestions made you would have to start with a Clean Sheet. Management, Labor,Engineering and Marketing would have to be changed radically. You could not afford the time for the corporation to go thru a metamorphosis.
The scale reductions are one part of that process. I am speaking of brands Volumes and manufacturing cost. Perhaps BK is the only way to address this change. But then there is a human cost.
Do Socala4 statements appear to be some sort of revelation to the readers of this forum ? God, I hope not. These subjects were know over 30 years ago. The impetus for change was obviously market share and legacy costs. The transition required and mandated by some of the posters could not happen as quickly due to labor demands. But I would venture to guess it will happen faster than any economic futurist will imagine. SoCala4, since you feel so strongly in your position I might make a suggestion. PLEASE ,go to a shareholders meeting and pose your obvious solutions to Wagoner. Who knows it might get their attention. When you tell them how to do it you have to acknowledge your inability to influence anything. I may be wrong but maybe it will generate an an offer as a strategic consultant for YORK. ............NAW !!!!
You seem to be under the impression that negative consumer attitudes toward GM products appeared magically out of thin air, or that they've been influenced by some media conspiracy.
In reality, American consumers have had negative experiences with these products, and have had better experiences with those of the competitors. People are defecting from Chevy to Honda, not the other way around. It should be obvious that this isn't due to black magic, voodoo dolls, or hypnosis, but because the competitors field better products.
PLEASE ,go to a shareholders meeting and pose the obvious solutions to Wagoner.
That would be a bit like trying to talk sense with Mussolini about the problems with fascism -- he won't listen. No point in listening, when he has the lackeys serving him the Kool Aid, assuring him that everything is just fine the way things are now.
To change in tune with the aforementioned suggestions you would have to start with a Clean Sheet. Management, Labor,Engineering and Marketing would have to be changed radically.
Now we're getting somewhere. A GM turnaround will require radical surgery, this isn't just a minor face lift.
The current business model simply doesn't work. You might have an emotional investment in the company continuing to fail using the same old failed methods and structures, but I don't.
At its current pace, there won't be a company left to save. Once GMAC has been sold off, GM will have no choice but to make money from automaking, and I have to wonder whether they'll be able to do it, barring some radical decline in fuel prices. (Did anyone notice that oil hit $71 per barrel today?)
I'd say socala has at least a few purdy good ideas. You don't but seem to think ya do. Thats okay georgie. When GM collapses from the management of those incompetant butt-kissers you can move in and tell'em what ta do! :mad:
Well, I'll differ with you there -- I think that BK would actually be a good step for GM...IF they used the opportunity that comes from it to improve the products, and to rationalize the product line and the distribution channels. But seeing that GM management only understands cost reduction, rather than market building, I suspect that BK won't do GM any good. Just as they failed to invest the company's money wisely when it was profitable, I seriously doubt that this will lead to better products.
GM's been making engines or nearly 100 years and GM management is telling me they can't make a fuel efficient four cylinder or they feel that the profit margin isn't there.
Given the success that others have had selling these types of products to American consumers, this is obviously a lie. If there wasn't a market for these cars, then why are the Civic and Corolla consistent top sellers in the passenger car category?
Their current game plan screams to me that they want bankruptcy to dissolve the union and then reorganize to focus in on highly profitable specialty vehicles (i.e. Cadillac, Corvette, etc).
I agree, but unfortunately, this high-value niche-vehicle strategy is not likely to work. I suspect that GM wants to become the BMW of trucks, when Toyota will probably soon be doing a better job of capturing that market. GM management types need to realize that much of their advantage in trucks has been due to barriers that have kept out competitors, not because of their products, and that its rivals will be making a concerted effort to knock GM out of its top slot. (Despite the rhetoric, I'm sure that Toyota would love to dethrone GM, and will target some segments specifically to make sure that happens.
Condescension is not attractive on this forum. For one that is learned in things such as solar eclipse and Egytology I would think you could dig deeper for a more lucid response, when you disagree with other posters.
I personally think that George35 has a more realistic view of the situation at GM. I am not saying that Socala does not have valid concerns. I have to go on record saying that the outcome at Ford & GM will not improve until a major shakeup in the UAW contracts is completed. The UAW has a better chance of salvaging some of their gains by not forcing GM into Chapter 11.
I don't know why so much talk of PU trucks and SUVs being dead. They may take a little hit each time the gas goes to another plateau. They are very popular and from where I sit I don't see people getting out of their F150s and into a Civic. It is the only thing that is keeping Ford & GM from immediate collapse.
I guess I am backward I switched from Toyota, Datsun, Honda & Subaru in the 1960s & 70s to Chevy PU trucks in the 1980s and have never considered going back. GM is not doing everything wrong. I would like to thank the UAW employees of Indiana for my 2005 GMC PU that I like very much.
I agree that money made during the greedy 1990s was not always used wisely. It was a time when corporate leaders went from less than 100 times average employee earnings, to almost 600 times average employee earnings. Corporate greed brought down several giants during that time and some had deep enough pockets to survive into the 21st century. Huge CEO benefit packages are obscene to most of us. They are border line criminal when the company is not making profits that can justify those packages.
Rocky
You better not leave out management, engineers, etc. The 2007' will probably be light years ahead of the 06's
Rocky
It's OK to disagree about things, but three's no need to be disagreeable while doing so.
What kind of car do you have? Maybe the moderator can direct you to the right place.
The sales of SUVs are down across the board and pickups have leveled off. With gas prices hovering around $3, people aren't too eager to drive vehicles that get only 18 mpg on the highway. But you are correct, that their PU and SUV sales are keeping them afloat.
Right now GM (and to some degree Ford) are a half step behind the competittion, this is mainly due to the profits loss. Their development timeline is greater than Japan and Korea and even Germany. Gas prices are up to $3 a gallon and they are releasing the Tahoe instead of a hybrid or an attractive economy car. They released 4 minivans two years and they were already behind the leaders in innovation, performance and quality.
Here are a few of my suggestions. They need to eliminate Saturn since it only competes with Chevy and not the imports. Currently, there is no product in Saturns lineup that competes well outside of GM. Let your designers produce the vehicles and not the accountants. Stop squeezing your suppliers to lower their profits. It produces poor components. Aren't you sick of replacing the same parts in different model vehicles? Finally, eliminate the rebates. By offering $2k and $3k rebates, you are simply admitting that your vehicles are not as good as the competition and lowering your profits.
I hope GM does not have to go BK. That move hurts the local economy. But any other plan, will take time which I'm not sure GM has.