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So repeat after me - awards for cars are fine, future models are pretty and sound oh so good, UAW can make as much as GM can afford, quality polls can be #1, car mags can name their car of the year, fleet sales vs. retail, market-share; BUT that all is irrelevant compared to making $$. To be viable GM needs to show that they can shortly start making money, and that further loans will not be asked for. All the awards, quality, and future plans need to start making profit real, real soon!
Making PROFIT = $$, is the overall judge of whether all these business aspects are adequate. GM needs to adjust to the proper size and sales mix NOW, to meet the market NOW, to make $$ NOW.
They can NOT continue to lose $$, and expect us to give them $$ based on ideas they are slowly implementing over years.
I believe that will be a major problem / drawback with most people 62. Most don't / won't give up conveniences in order to get the 40 miles w/o recharge. Should GM put that in as a caveat: "40 miles obtain by not having the following accessories activated..."? While I drive my vehicle(s) without the air most times in summer and without the radio on most times period but that's just me I don't expect others to follow my lead.
And what of in the winter - you have the lights, heater, cycling the r-w-d (rear window defroster) and possibly the windshield wipers going (maybe intermittent, maybe full on). Should they not turn those on in order to get the 40 miles? That's my main reason against these types of vehicles - I'd constantly be looking at the volt gauge (or gage?) when sitting in traffic, especially in the winter. I mean, even when it hasn't snowing the temps have been well below zero here since last of November and we now entering into what's usually the coldest month of winter. The cold is murder on batteries, whether they are AGM, flooded, VR, Li-ion, Ni-Cad...
Just a thought.
is a leading candidate to help oversee federal loans to automakers, The
Detroit News reported today.
The Obama administration is considering Girsky for second-in-command on
the auto team or for a position on the restructuring board for GM and
Chrysler LLC, the paper said, citing unidentified sources. Steven
Rattner, a partner at the Quadrangle Group, a New York private equity
firm, is still a leading candidate to be the so-called auto czar, The
News said.
Girsky formerly worked as a senior auto analyst with Morgan Stanley. He
also counseled GM CEO Rick Wagoner for about a year through mid-2006 and
advised Centerbridge Partners LP in 2007 when the private equity firm
tried to buy Chrysler from Daimler AG. He later became president of
Centerbridge.
Most recently, the UAW hired Girsky as an adviser on a possible
GM-Chrysler merger. He also is a director of auto parts supplier Dana
Holding Corp.
That's ok if the company downsizes the fixed costs. But with even the low margin fleet business declining, doesn't that mean GM should be downsizing even faster? And what progress have they made on truly substantive cuts? Health care in 2010? Buyout offers? That strikes me as pruning brown leaves off the tree when entire branches need to be amputated -- like Saab, Hummer, Saturn, Pontiac, GMC.
Read today's Edmund's article "GM Announces New Round of Incentives". Sounds pretty much like incremental business as usual. This is a replay from 3 years ago. Fleet is down drastically but the "higher margin" business is offering massive incentives! We appreciate how polite you are compared to many on these forums but it seems like there's a lot of spin to try and make disastrous news less negative. It looks like a train wreck in the making to me. Meanwhile the Board and Wagoner steer the shareholders into the dumper.
Like I keep saying, as the market stays depressed (read: unemployment increases) sales will not reach the forecast and more bailout money will be negotiated. Anyone having solid evidence to the contrary, be my guest!
Any takers on C11 yet? What cost must be reached before C11 would have been a screaming deal??
Regards,
OW
GM received $4 billion late last year and was to get $5.4 billion Jan. 16 and another $4 billion on Feb. 17, the day it is to submit its plan to show the government how it will become viable.
I think they're in trouble since their plan so far is to examine the viability of making a plan to become viable.
http://www.usatoday.com/news/washington/2009-02-04-stimulus_N.htm
"A failure to act, and act now, will turn crisis into a catastrophe."
I also agree with you that GM is in trouble, as they are acting about 10X slower then they need to. They are not acting NOW.
GM and the rest of the D3 were ships that were creaky during the good weather days when the vehicle market was 16M. they were taking water on then. They did nothing to prepare for a storm. The storm is here now, and they're sinking, not doing much about it during the extra few months the government has bought them with the loans.
I'd argue that while Ford is still in horrible shape they have done quite a bit to work on plugging the leaky ship. Too soon to tell if it will work. If C or GM did fail then that would add business for Ford.
That's assuming Ford can prop up the suppliers after they lose GM and Chrysler money (not that they're getting much now) long enough for Ford to actually GET the business.
Ford is in the best position...not exactly a GOOD position, but the best one to survive.
“Chevrolet is very different from Opel and both are different from Saab,” GM Europe’s Head of Sales, Brent Dewar, told Automotive News Europe.
GM will continue to designate Chevrolet as its entry-level brand aimed primarily at emerging markets, Opel as its Western European volume brand and Saab as its premium/near-luxury brand.
The move also comes with the apparent ulterior motive of further separating Saab from the rest of GM’s units in Europe.
“We will not be working through many different layers and we can better focus our brand,” Jan-Ake Jonsson, Saab’s European marketing director, said.
Table 10 – 2nd Half 2008 Liquidity Actions
Additional Cash Savings Through YE 2009
July 15th Announced Liquidity Actions
GMNA Structural Cost
~ $2.5B On-Track
Salaried Employment Savings
~ $1.5B Largely Complete
Capital Expenditure Reductions
~ $1.5B On-Track
Working Capital Improvements
~ $2.0B On-Track
UAW VEBA Deferrals
~ $1.7B Complete
Dividend Suspension
~ $0.8B Complete
Subtotal Operating & Other Actions
$10B
Asset Sales
~ $2-4B In Process
Capital Market Activities
~ $2-3B Behind Schedule
Total Announced July 15
$15B
Nov 7th Announced Liquidity Actions
Capital Expenditure Reductions
~ $2.5B On-Track
GMNA Structural Cost Reductions
~ $1.5B On-Track
Working Capital Improvements
~ $0.5B On-Track
Further Salaried Actions
~ $0.5B On-Track
Total Announced Nov 7
$5B
Total Liquidity Impact Through YE 2009
$20B
This was from the document dated Dec 2, 2008.
If they complete the above restructuring GM will have enough liquidity to pay their bills at a 10.5 million market. Again further restructuring will be announced to increase the $20 billion.
Also, did the guy writing that forget the bad news? GM might cut costs $20B, but how much is their sales revenue down? More than $20B? If so they're not cutting enough, fast enough.
BTW - do you think Obama's words might be directed ever so slightly towards GM and Chrysler? Do you think Congress and the president are going to see their approval ratings plummet by continuing to favor the auto-industry over other industries?
This is a Marketing "doing something (stupid) to explain our existence" case. This did nothing to stop the slide of GM marketshare in the U.S. For years Cadillac, Chevy, GMC, Buick all ran their own advertising and stressed their differences.
What makes something successful is a great product at a great price, with the produced still making profit. You need all 3. You've failed if you don't make profit, or can't sell product for either or both of the other reasons.
Hyundai is putting together an improbable run during this improbably awful car market. Its January sales rose by 14 percent compared with a year earlier, to more than 24,500 units.
The company and outside analysts were quick to credit not only the company's heavily promoted Hyundai Assurance program - which was highlighted in a Super Bowl advertisement - but also the surprising success of its recently launched and all-new Genesis flagship, which picked up more than 1,000 buyers in January.
Genesis was named the North American Car of the Year at the North American International Auto Show last month, an honor that "further spurred" the car's momentum, said Hyundai's Zuchowski.
Hyundai's Eastern sales region saw a 20-percent sales increase over last January and Hyundai said the Assurance program, "gets to the root cause of today's economic concerns - fear of job loss - and shows consumers we have faith in them, and faith in our economy."
He said after being "encouraged" by the company's strong start in January, Hyundai executives are "hopeful that this energy can be sustained into February as we launch the new Genesis Coupe and Elantra Touring."
Sales of several other Hyundai models - Accent, Sonata, Santa Fe and Veracruz - also increased in January over a year earlier.
Regards,
OW
"
Maybe these will go into production to increase the MPG of the work trucks. First test unit to be delivered to PG&E March 2009. I believe their test SUV is a Hummer H3, at least that is what is shown in the video:
http://www.rasertech.com/media/pdfs/Series_PHEV_Drive_System_Flyer_07.pdf
I could view this on my work computer, but no sound. Will try at home tonigth:
http://www.rasertech.com/media/movies/html/fev_jan09.html
http://www.government-fleet.com/Channel/Vehicle-Research/News/Story/2008/08/Rase- r-Developing-100-MPG-Plug-in-Hybrid-Light-Truck-for-Initial-Release-to-Utility-a- nd-Government-F.aspx
I have no idea if these will ever come to the consumer market or how much they would cost...but I like the visuals and pictures of their concept anyway.
Bill
That is why the factories are shut down now.
IIRC, the main reason for GM not pushing fleet sales was to try and prop up resale value of the cars. For example, if they sell 200,000 Malibus this year and half are to rental companies, that means almost 100,000 come back on the market in 18-24 months, thereby flooding the market and reducing the value for those that bought retail and want to trade in at the 24-36 month timeframe.
So when the retail customer comes in at that point and finds out they are still upside down on their loan, this has 2 results; customers wait longer to buy again, or they go elsewhere.
So if they sell 160,000 next year, and only 32,000 go to fleets, this can begin a process in which these customers can come back in 2-3 yrs and expect to get more for the car, just based on the fact that there are that many LESS sitting on the lots used.
I just don't want GM to be looked at yet again of selling a bill of goods, putting something into market that doesn't deliver on the promise. Those days are over.
BTW, I'm not an accountant, so that's opinion only.
This is what I mean when I say "GM is not setting the bar high enough". With the exception of CTS, they aren't doing enough. The Malibu, while pretty good, is only noteworthy for how good it is for GM. It is still only a pretty decent vehicle. It certainly doesn't blow away a Camry or Accord. In 2003 they should have said "we will build a car clearly better than a Camry or Accord". "We will build a car clearly better than a Civic".
Set the bar higher, GM -- if you have enough money left to do so.
That is why the factories are shut down now.
That's only a temporary cost reduction.
They should be abandoning many of those plants. The fixed costs remain for a shut down plant and that is a boat anchor when your products have to be give large incentives to sell. Better to have too little capacity and be able to charge a premium than too much capacity and give your product away. The airlines learned that years ago and the ones that are left are handling their capacity very carefully. They are quick to get rid of planes when the economy tanks. GM should be dumping even more plants permanently.
Regards,
OW
Yeah, it costs money. Is it worth the investment? Only GM can decide. Customers have been speaking for years now.
Regards,
OW
This has been the strategy for a couple years now, reducing amount of rental fleet. However January was not part of that strategy. Plants were closed due to too many days of stock at the dealerships. They just could not build the cars to sell too fleet.
GMNA Structural Cost
~ $2.5B On-Track
Salaried Employment Savings
~ $1.5B Largely Complete
Capital Expenditure Reductions
~ $1.5B On-Track
Working Capital Improvements
~ $2.0B On-Track
UAW VEBA Deferrals
~ $1.7B Complete
Dividend Suspension
~ $0.8B Complete
Asset Sales
~ $2-4B In Process
Capital Market Activities
~ $2-3B Behind Schedule
Capital Expenditure Reductions
~ $2.5B On-Track
GMNA Structural Cost Reductions
~ $1.5B On-Track
Working Capital Improvements
~ $0.5B On-Track
Further Salaried Actions
~ $0.5B On-Track
The two auto makers plan to set up a light-commercial-vehicle joint venture, said an FAW official who declined to be named. Further details will be released in the next few days, the official added.
"GM China and FAW have been in discussions to set up a potential partnership," GM spokesman Henry Wong said, but declined to elaborate.
Light commercial vehicles include light trucks, pickup trucks and shuttle-type buses such as Ford Motor Co.'s Transit, said CSM Worldwide analyst Yale Zhang.
Kevin Wale, president and managing director of the GM China, said that the new models are developed by Pan-Asia Technical Automotive Center and tailored specially for Chinese consumers.
More all-new or upgraded models of Wuling, Opel, Cadillac and Saab brands are also scheduled to come on stream within the next few years, he continued.
Mr. Carlisle said government assistance would allow GM to continue with the development of the plant in the eastern seaboard province of Rayong and also strengthen growth opportunities in the Thai and export markets.
In mid-August last year GM said the diesel-engine and one-ton pickup project would start operation in 2010 with a capacity of more than 100,000 units per year.
The project would be GM's first diesel-engine plant in Southeast Asia and would provide four-cylinder diesel engines for use by Chevrolet in Thailand and in overseas markets.
When industrywide U.S. sales are down 18%, the Malibu -- which competes in the hyper-competitive midsize car market -- finished 2008 with U.S. sales up 51.5% from the year before.
A new study by J.D. Power and Associates gives GM high marks for the Malibu launch, ranking it No. 3 among other launches in 2007. (The No. 1 vehicle is another GM product, the Buick Enclave, an important model for the automaker but one that does not see as high a sales volume as the Malibu, which is one of GM's best-selling cars.)
Launching a new model is important for an automaker. After a car has been on the market a year, a company has a good indication of how successful the vehicle will be over its lifetime.
"It's absolutely critical that you get that first year right because that's where you're actually going to make a lot of your money and set the standard for the years to come," said Dave Sargent, vice president of automotive research at J.D. Power. "Something like the Malibu -- which launches very well, has very strong quality, very strong appeal and the financial metrics look very good in the first year -- one can anticipate that as the vehicle continues into its second, third and fourth year those will tend to continue."
The vehicle won several industry awards, including 2008 North American Car of the Year. Last summer, the Malibu also won the award for best initial quality among midsize cars from J.D. Power, beating the Toyota Camry and Honda Accord. (Last year, Camry sales were down 7.7% and Accord sales were down 5%.)
According to GM's numbers:
The 2008 Malibu's retail share increased 3.9 percentage points over the 2007 model.
Its residual value, which estimates the vehicle's future resale value, increased 9 percentage points.
Customers' opinions of the vehicle improved by 13 percentage points.
The new J.D. Power study, called the Vehicle Launch Index, looks at a variety of factors and measures performances against industry and segment benchmarks.
"They didn't run up a high inventory on the vehicle. They managed to keep demand and production pretty well in line," Sargent said. "In fact they added a third shift at the Orion plant to satisfy demand."
GM also did a good job holding the price the manufacturer charges the dealer for the vehicle.
"In fact, it improved over the 12 months of the launch. They weren't having to discount the vehicles to the dealers, if anything they were actually charging more," Sargent said. "A sign of a good launch is where you go through the first 12 months, you actually end up making more money on the car 12 months out than you did in the first month, which is something we like to see."
Chevy is undeniably GM's powerhouse, and it's one of the hottest brands on the market, thanks to the Chevy Malibu, Chevy Traverse, the upcoming Chevy Camaro and a new, vastly upgraded Chevy Equinox that analysts expect to sell well.
But few cars are as eagerly anticipated as Chevy's new hybrid plug-in, the Volt, a four-door sedan that will be able to go 40 miles -- more than the average to-and-from-work commute for Americans -- solely on electric power, with a gasoline engine ready to go as backup for several hundred miles. The introduction is set for fall 2010.
Cadillac
This is another hot brand for GM. Thanks to billions of dollars in product development, and exciting designs such as the CTS and XLR, Cadillac now has a secure place in the luxury field, competing well with the best of the best from Europe.
The edgy new SRX luxury crossover is due this fall, along with the Cadillac CTS sport wagon. And the DTS and STS sedans will be replaced by a new car, analysts say. Rumors say a Cadillac smaller than the CTS is a good possibility.
Cadillac officials believe that in the "brave new world" ahead in the auto industry, there's really not too much that needs to be done to keep up and possibly surpass the competition.
But given the international proclivities of the people who run Cadillac and GM these days, it's reasonable to expect that Cadillac's lineup will continue to grow quickly as it competes on the world stage with BMW, Mercedes and Audi.
Buick
It surely came as a surprise to some when GM announced it would keep Buick as a core product in its portfolio.
But while Buicks don't sell especially well in the United States, except for the wildly popular Enclave crossover, Buick is a strong product in China and other parts of Asia.
In fact, Buick's newest product, the LaCrosse sedan, a sleek, Euro-designed upscale luxury sedan highlighted by a futuristic interior with soft blue lights in strategic places, was designed in China and other international locales.
Beyond the introduction of the LaCrosse for 2010, little is known about future Buick products. The company has many options. GM has a portfolio of interesting Buicks sold in China, and there are rumors that some of Opel's models may be brought here for sale by Buick.
Pontiac
GM's top executives say they want Pontiac to be the "Corvette" of the Buick-Pontiac-GMC truck group -- or at the very least, Pontiac will be the youth-oriented division of GM.
That all makes sense because Pontiac's always been perceived as being the sports or performance brand for GM. But to do this effectively, Pontiac will be losing a good number of models.
Although GM hasn't said which Pontiac cars will go under, the future "boutique" performance car business model for Pontiac suggests that the small crossover Vibe, the compact economy car G5 and the midsize crossover Torrent would bite the dust.
That leaves the Solstice roadster and all-new sports coupe, the G8 high-performance sport sedan and perhaps the G6 intermediate line in Pontiac's portfolio.
Saturn
GM's biggest decision will be what to do with its Saturn line. All options are on the table, including selling the brand to another company or perhaps even to its own well-regarded dealer network, closing the brand, continuing it under some less expensive, more efficient system, or just about anything else one might imagine, highly placed GM executives say.
http://www.autoblog.com/photos/chevrolet-camaro-production/1334094/
Automakers seeking more help from the U.S. government will have to abide by a $500,000 cap on pay for top executives and other tough rules meant to keep companies from misusing taxpayer money.
The rules are -- in some ways -- less severe than the cuts made by General Motors Corp. and Chrysler LLC, the only companies taking federal loan money, whose chief executives are working for $1 a year. But it could mean pay cuts for top executives at all the Detroit automakers if they get more aid to survive a worsening recession.
The changes do not affect the $13.4-billion loan to GM -- where Chairman and Chief Executive Rick Wagoner and the board of directors are working for $1 this year -- and Chrysler LLC's $4-billion loan. But it would apply to the additional $3 billion Chrysler is seeking, and would affect GM if it sought more cash.
GM and Chrysler already had agreed to limit executive pay, such as a bar on "golden parachute" retirement packages, cuts in pay for other top executives and a ban on corporate jet travel under the loans they received in December.
Four years from now, 27 percent of them - 1,750 dealers - will be gone, according to the restructuring plan the Detroit automaker submitted to Congress.
They don't need anymore money from the government right? They'll be able to issue new bonds or issue new stock, or get a loan from a bank?
http://www.marketwatch.com/news/story/Payrolls-plunge-598000-most-34/story.aspx?- guid=%7BA5FE8FAF%2DC299%2D4EB4%2DBDE6%2DBADB3C394840%7D
Apparently not, if " GM needs to push that the Volt is in fact a Hybrid, and stop solely marketing / focusing on the 40 miles on electric." Sounds like you're saying that they're selling a bill of goods that won't deliver.
Old habits die hard, especially at GM apparently.
Cut workers and mothball the plants. Or GM might want to sell off the plants.
http://www.marketwatch.com/news/story/Russias-mining-giant-Rusal-cut/story.aspx?- guid=%7B3C5B5A5E%2D4484%2D4752%2D899F%2D4F1E1EBD8276%7D
GM should also immediately (tomorrow) sell Saab, Hummer, and Saturn for whatever it can get. It would be better for them to sell those brands for $1M each, rather than to get a LOSS EACH MONTH from them. Maybe they're losing $25-$100M each/month? Cut your losses GM!
blah blah blah
That leaves the Solstice roadster and all-new sports coupe, the G8 high-performance sport sedan and perhaps the G6 intermediate line in Pontiac's portfolio.
Wait a sec, so the "sporty performance" brand is going to consist of a sports coupe, a roadster, the G8 wannabe muscle-car....and a Malibu Clone???
a total of $18 billion in term loan and revolving credit facilities, which is larger than the amount discussed during the Congressional hearings of November 18-19, 2008, that includes provision for the ―Downside‖ industry sales scenario, the subject of considerable inquiry during the hearings; (10.5 million sales)
Here is the loan payback:
Assuming the lower, depressed industry volumes under the Downside scenario, GM would make full use of the $18 billion temporary Federal loan facilities through most of 2012. While not shown, Downside industry volumes in 2013 are projected at 13.5 million units. Under this Downside Scenario, the company would expect to begin partial repayment of the temporary Federal loan facilities in 2012.
If we were not in the downside scenario:
Against the Baseline Scenario, GM would make partial use of the temporary Federal loan facilities in 2009 and 2010, with repayments beginning in 2011 and with a full pay down by the end of 2012. As various restructuring, legacy-related and other cost reduction actions take hold, General Motors will be able to operate profitably (at the EBIT level) at industry volume levels between 12.5-13 million units. The company‘s current Baseline projections show that GM will be profitable on an automotive Adjusted Earnings Before Taxes basis in 2011, after the restructuring actions.
I just don't want GM to be looked at yet again of selling a bill of goods, putting something into market that doesn't deliver on the promise. Those days are over.
Apparently not, if " GM needs to push that the Volt is in fact a Hybrid, and stop solely marketing / focusing on the 40 miles on electric."
Sounds like you're saying that they're selling a bill of goods that won't deliver.
Old habits die hard, especially at GM apparently.
G8 a wannabe muscle car????
Seems like it, though it's a bit on the expensive side to be considered one (muscle cars tend to be cheaper like Camaro and Mustang...maybe G8 is shooting for luxo-muscle?)
The G8 would probably equate more to something like an old Chrysler 300 Letter Series, DeSoto Adventurer, Catalina 2+2, or an Impala SS409, than anything based off a Mustang or Camaro.
Well anyway, I'm sure GM appreciates your good-work, and I'll get back to pointing out to you the reality that the rest of the world sees as far as how a company should run, and the drirection of the economy.
BTW - 600,000 less potential customers added to the unemployment roles during Jan. Does GM think their retail sales will go up due to that? Does GM tink companies may be spending more or less on fleet purchases? :P