Actually, that was a real possibility, but it fell through due to each companies situation.
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GM CEO Wagoner to step down immediately
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Actually, that was a real possibility, but it fell through due to each companies situation.
The Cobalt can be excused, because it is a compact car and competes directly against other FWD cars (though the AWD WRX and Evo are the kings of the compact sports segment). The HHR is a mystery to me, sort of an attempt to break into the PT Cruiser's niche, a niche that is fading and barely big enough for one car to begin with.
I see that Pontiac and Saturn are being phased out in the next few years, though GM is keeping the highly desirable Buick brand alive. It makes me chuckle about those "We're still here" Saturn commercial - it should be "We're still here - but not for long".
Oh, I know -- I meant that it was a real possibility but it has not been for some time now, so talking about it as a certainty at the end of March seemed off.
(The blog post didn't have a date that I could see).FWIW... Obama's administration confirmed that he pulled the trigger on Wagoner:
http://www.reuters.com/article/businessNews/idUSTRE52S26X20090329
(I heard it on NPR, actually, but FWIW.)
I have really mixed emotions about all this.
I get the feeling that businesses fail because there are too many hands in the cookie jar. The CEO is accountable to the board of directors, the board is trying to please the shareholders, and the shareholders can only keep their eyes on the almighty dollar, or share price as the case may be. It blinds people to making the good, far-sighted decision.
There used to be a family owned pharmaceutical company in a city not far from me. The owners prided themselves in taking care of the employees and the community they lived in. They were not slaves to stock prices and could afford to invest in the workers and the city at the cost of profit margins. Well, they got bought out. The community programs were the first thing to go, then wages got cut, and within five years the plant was closed and everything was transfered overseas. Now we have another empty building which was previously a 150 year old family business. How did the family succeed when the Corporation could only rob the assets and run the facility in the ground?
What's my point? With the government stepping in, it's almost like every member of Congress now gets a vote on the board of directors. And these folks are only concerned about votes and the factories in their districts, not the overall health of the company or keeping jobs in another community. Talk about shortsighted.
My vote is to get the government out and let them all fail. The banks and car companies alike. Sure it will hurt in the short term, but the result will be stronger, leaner, more innovative companies that might have learned their lessons.
I get the feeling that businesses fail because there are too many hands in the cookie jar. The CEO is accountable to the board of directors, the board is trying to please the shareholders, and the shareholders can only keep their eyes on the almighty dollar, or share price as the case may be. It blinds people to making the good, far-sighted decision.
There used to be a family owned pharmaceutical company in a city not far from me. The owners prided themselves in taking care of the employees and the community they lived in. They were not slaves to stock prices and could afford to invest in the workers and the city at the cost of profit margins. Well, they got bought out. The community programs were the first thing to go, then wages got cut, and within five years the plant was closed and everything was transfered overseas. Now we have another empty building which was previously a 150 year old family business. How did the family succeed when the Corporation could only rob the assets and run the facility in the ground?
What's my point? With the government stepping in, it's almost like every member of Congress now gets a vote on the board of directors. And these folks are only concerned about votes and the factories in their districts, not the overall health of the company or keeping jobs in another community. Talk about shortsighted.
My vote is to get the government out and let them all fail. The banks and car companies alike. Sure it will hurt in the short term, but the result will be stronger, leaner, more innovative companies that might have learned their lessons.
I just watched Obama's speech about the auto industry. The only thing I really disagree with is Obama's support of the Buick brand.
There is a certain amount of risk for both parties in a government bailout of the auto industry, and hard line capitalists will not like this level of government intervention. But this is a chance for a major overhaul of the US auto industry that could really make it a competitive force in the world once again.
The funny thing for me is that everyone seems to be arguing a lot more ove the car industry bailout money, and yet the numbers involved are a lot smaller than the sickening shovelful of money we've tossed at AIG.
The problem with that is foreign competition.
There is a certain amount of risk for both parties in a government bailout of the auto industry, and hard line capitalists will not like this level of government intervention. But this is a chance for a major overhaul of the US auto industry that could really make it a competitive force in the world once again.
The funny thing for me is that everyone seems to be arguing a lot more ove the car industry bailout money, and yet the numbers involved are a lot smaller than the sickening shovelful of money we've tossed at AIG.
The problem with that is foreign competition.
I just watched Obama's speech about the auto industry. The only thing I really disagree with is Obama's support of the Buick brand.
Problem with killing Buick is that it is insanely popular in China. Now you can say kill Buick in NA. But, then the Saturn issue arises( as I am sure there are a lot more people wanting Buick dead vs Saturn). Saturn can not demand the premium it would cost to have Opel's that have the features that Americans would want. That is why the Astra is poorly equipped. Buick can as they are already setup to be a premium brand. I will miss Saturn personally. An experiment that went wrong due to brand hierarchy.
Now that it is today, Impala is going RWD in 2015 or so to be put on an extended Alpha platform( the platform that will ultimately host Caddy's true 3 series competitor). That is the latest proposal within the GM ranks.
It's been a while since I've lived in the states. The last time I visited a few years ago, it seemed like Ford and GM has too many models in their lineups.
Offering fewer models may be a better way to go in the future.
I think one of GM's problems has been a weak overall brand image due to too many divisions. As a car guy, I am nostalgic and not happy about killing brands off.
But GM would be better off paring down to Chevy, Cadillac and GMC. Pontiac, Saturn and Buick could survive as niche vehicles (perhaps in the form of the GTO or Firebird, some old-folks car for Buick, and a Saturn Hybrid or Fuel Cell car). But GM doesn't need all those divisions - it's wasteful.
GM needs to slim down the number of divisions so the remaining divisions can be more efficient and gain a stronger brand image.
You'll note that Ford, a company with half as many divisions to start with, does not seem to be hurting as badly at the moment.
You have to look at the specifics. Perhaps he refused to go along to the administration's idea that GM use bankruptcy protection. Or they had a sticking point on ome other issue. Likely it was a disagreement they could not work around. I think this was a case of the person not the industry
I heard the president's speech this morning and it looks like the government is thinking bankruptcy is a reasonable option for GM unless they come up with a better plan in 60 days. He also gave Chrysler 30 days: Either find a buyer or "vanish". He did not say it that way but did say they'd get no more bailouts and had a plan for the government to cover the warranty work.
My guess is that by next year Chrysler has been bought at fire sale price and GM is 1/2 it's current size. Ford seems to be hanging in there.
It is disappointing that it almost took the death of GM for the UAW to finally take some serious concessions to ensure the viability of the comany (2007 VEBA agreement) and that it was done under Wagoner's watch, it is also disappointing that as the company is basically over the edge of the cliff and the rope is about to break that the bond holders are playing chicken over how much money they get as opposed to actively helping GM become viable again.
Then again maybe they figured if they held out long enough Wagoner would be kicked out?
Very disappointed to see Wagoner go, he stopped the rot, started turning the ship and got it about 60% around but the cash wasn't there to allow them to make it happen sooner, basically they got so far and were make great progress and then a rudder fell off or a propellor failed (the financial markets died).
Since Wagoner has gone I expect we should see many financial executives to be fall on their swords as well, GM (& Chrysler) had to get grovel lose face etc etc to get $17 billion and the financials just need to say we need some more cash friends pals congress/senate buddies and they got it with few questions asked.
Example A: AIG = $180 billion (so far)
Ford the record, I drive a Saab 9-3, Saab is a GM company. Prior to that a Ford Crown Victoria, Ford Explorer Sport, Ford Focus & a Pontiac Grand Prix.
Then again maybe they figured if they held out long enough Wagoner would be kicked out?
Very disappointed to see Wagoner go, he stopped the rot, started turning the ship and got it about 60% around but the cash wasn't there to allow them to make it happen sooner, basically they got so far and were make great progress and then a rudder fell off or a propellor failed (the financial markets died).
Since Wagoner has gone I expect we should see many financial executives to be fall on their swords as well, GM (& Chrysler) had to get grovel lose face etc etc to get $17 billion and the financials just need to say we need some more cash friends pals congress/senate buddies and they got it with few questions asked.
Example A: AIG = $180 billion (so far)
Ford the record, I drive a Saab 9-3, Saab is a GM company. Prior to that a Ford Crown Victoria, Ford Explorer Sport, Ford Focus & a Pontiac Grand Prix.
The numbers are small, but they don't really capture the stakes of the automotive industry problem. If the US automakers can be made to be financially strong, ultimately they represent a vast number of middle-class income jobs within their keiretsu. Although I agree that the differential focus on them is wrong, I think it's wrong in the lack of oversight the financial industry was given, and not wrong in the lack of oversight the auto industry is being given. They need to be more than just propped up. They need to be forced to become globally competitive.
I totally agree - the differences is in the size of the bailouts are interesting, but the shocking part is that we simply dumped money into Wall Street, and there was not enough accountability. The auto bailout is being done in a more responsible manner IMHO.I would like nothing better than to see some Wall Street execs' heads roll.
This is what I think GM should look like for the North American market by 2011:
Chevrolet
Aveo B-segment sedan and hatchback (new model coming 2010)
Meriva B-segment "tall wagon" based on new Aveo platform
Cruze C-segment sedan and possible coupe
Malibu sedan based on Opel Insignia
Volt plug-in hybrid electric vehicle (PHEV) sedan
Corvette sports car
Cadillac
BLS sedan and possible wagon based on modified Cruze platform
CTS sedan, hatchback and wagon
DTS sedan
SRX "crossover" SUV (with possible hybrid drivetrain)
Escalade large SUV (switched to diesel power with Duramax engine)
GMC
All light trucks and SUVs except for the Cadillacs I mentioned earlier
GM should license the new ultra-clean diesel technology from Ricardo in the UK (this will allow GM to offer diesel engines almost across their entire product line) and do a cross-licensing deal where GM gets Toyota's Hybrid Synery Drive technology and Toyota gets GM's PHEV technology developed for the Volt.
GM has their Two Mode hybrid system. They are just too stupid to implement it on their cars.......
I wonder what kind of severance package he will get for this?
According to CNN.com, $20.2 million...
http://www.cnn.com/2009/US/03/30/gm.ceo.compensation/index.html
Him as well as AIG and Lehman Bros. execs who bailed before the public found out are all laughing while their private resorts...
Well, at least banks were doing rather well during the good times. GM has been managed into bankruptcy during good times and bad.
I disagree. He was the man in charge when GM kept designing one crappy car after another. I have rented quite a few GM cars over the years and none was much good. Moreover, he was very proud about three or four years ago when GM started offering a bunch of new models with his team in charge for the full design cycle. Well, one of those cars was Pontiac G6. I rented one a few weeks back. That is an unmitigated disaster for a sports sedan. He was also the CEO of the company when it decided that fuel prices were going to stay low forever (or go back to being low soon once they started rising) and ignored fuel efficiency.
Having too many brands must be making it very hard to use marketing budget effectively. However, unless GM starts offering appealing cars in the first place, no amount of pruning brands or workers will help.
I agree with all those points... on the balance, I think they were enough to make him a terrible CEO for the company. But I do still claim, and I think the data supports the claim, that GM made a lot of cost cutting and efficiency progress during his reign, and also substantially improved quality in the sense of manufacturing defects and durability. The problem, as you say, is that they improved the quality of unappealing, low fuel efficiency, no-fun-to-drive cars and trucks.
GM, in hindsight, should have seriously looked at upgrading their low-end models to better compete against the lower-end models from Honda, Toyota, Hyundai, and the European manufacturers a long time ago here in the USA. They should have by now started selling the US version of four Opel models, Corsa, Meriva, Astra and Zafira, at least by now.
Meanwhile, Ford is preparing to start sales of the new Fiesta (which will actually be better than the European version because of the use of the very slick Powershift dual-clutch transmission) here in the USA at the beginning of 2010. (If Ford decides to offer the Duratorq TDCi 1.6-liter turbodiesel engine with Powershift gearbox all the more better--imagine Prius-like fuel economy!
)Classic political distraction, stir up the emotions of the masses while the real deals, money and power happen somewhere in the background. Notice lots of noise about tax havens lately
preying on the jealousy that most of us have because can't take advantage of them So what are they distracting us from? I think the USA and the UK want to inflate their way out of this mess, which makes us much poorer, and the other big economies who have experienced large inflation's before are not so sure about that idea!
Who will blink first
The money being dumped into wall street is primarily protecting bond holders, so its not really to wall streets benefit and it is most definitely not to the benefit of the political classes to investigate why they are bailing out bond holders and who those bond holders are.
But you are right, its absurd. I read recently that the sum of the proposed and actual USA bailouts for wall street (in the trillions) is almost the same as the amount of bad loans supposedly causing this whole mess in the first place. So why not just print the money and buy the bad loans directly
Meanwhile, Ford is preparing to start sales of the new Fiesta (which will actually be better than the European version because of the use of the very slick Powershift dual-clutch transmission) here in the USA at the beginning of 2010. (If Ford decides to offer the Duratorq TDCi 1.6-liter turbodiesel engine with Powershift gearbox all the more better--imagine Prius-like fuel economy!
The Jazz/Fit, Echo/Yaris, and some others have all made good homes in the US. The latest Fiesta seems more like the Polo, which I understand is also hitting our shores. All good signs. Death to anything with a curb weight over 3500 lbs.
(And ideally death to anything with a curb weight over 3000 lbs in a few years... ).
No, GM had always stated that the Two Mode was going into the Trucks/SUVS as that is where they could gain the most with the first generation, as can be seen by a Hybrid Tahoe getting better city milage than a Camry, you do the math on the weight difference.
Actually, if you were informed you would know that the two mode system was on city buses before it even got to the trucks/suvs. GM started by trying to make the most inefficent vehicles more efficent, than taking the easy way and making a small light car more efficent.
Also of note, there was never any official statement of the exact cost of putting the Two Mode into a vehicle but the closest we got that I saw was Bob Lutz indicating it would cost about the same as a small car, so roughly $10k. Which means that putting the system into vehicles other than high end full size SUVs did not make too much financial sense, as unless GM wanted to give up $5-8k per vehicle in subsidies to make the system a $2-5k premium over another model the demand would not be there in gen one vehicles as the excess cost would take too long too recover in gas savings over the life of the vehicles, If you could recover that kind of money over 3-5 years when say you have a Malibu already getting pretty good mileage, the returns diminish the more efficent the vehicle already is.
You will of course note that Toyota is inuable to use the Hybrid Synergy Drive on anything larger than a Highlander as the the weight of the vehicles makes their system useless. Or as you would put it...
"Toyota was too stupid to impliment their hybrid system on a medium SUV".
Then again Toyota was poo pooing the Chevrolet Volt because the battery system wouldnt work etc, when in fact Toyota had a heavy financial (production plant) interest in the batteries it uses for the HSD, so it had no interest in seeing the Volt working as it would make the HSD setup irrelevent. Then, once the Volt actually started progressing and GM was actively testing muels and getting the expected range Toyota suddenly changed its tune and cried ME TOO!!!!!! and decided to preannounce (vapourware) a Prius or similar with a similar setup to the Volt. Oh me oh my!
Hybrid wise GM was slow to the party, then once it arrived and had the product it wasn't financially in a position to get the technology into all the vehicles. Toyota tooks years to get the Prius into a position where a vehicle sold with a profit, yet even then it might take a while longer to call it truely profitable since so few people want to buy one now that gas prices dropped.
The Jazz/Fit, Echo/Yaris, and some others have all made good homes in the US. The latest Fiesta seems more like the Polo, which I understand is also hitting our shores. All good signs. Death to anything with a curb weight over 3500 lbs.
Had to do some digging for you re weight....
http://www.carpoint.com.au/news/2009/holdens-marshall-wears-green-badge-13182
Be really nice if we could get the weight down as the less weight carried the more efficent the same car can be.. or the smaller the engine you can put in to achieve the same performance. Though I don't see many people jumping on the band wagon nor the politicians trying to push too hard on it