They don't have a clue! Is GM Government Motors or Barak's Big Mess BBM?

What a colossal mess! General Motors became one of the most expensive bankruptcies in American history on Monday. After pouring billions of our money into GM since last fall and warning us that the B word would be devastating, we are now being told that this approach will create a "new" GM owned by the US, CANADA and the UAW! That means Chrysler and GM are owned by their union and the government. Well, it sure made AMTRAK the envy of public transportation didn't it? I may be wrong, but I don't think that Amtrak has ever been profitable and we all know how wonderful the service is! Petty politics have already entered the picture with Congressmen demanding that plants from the "old GM" be kept open in their respective districts irregardless of any type of analytical evaluation of the viability of the location. Can you imagine if a Congressman has a "can't miss" idea for a new car design? I have information from GM engineers that they can't make any product decisions without clearing it with treasury! You know that the folks at FORD are just jubilant! Ford has expressed concern that with the government running the competition the playing field may not be a level one. It is going to get very interesting.....
One thing that really bugs me from all of this is that Chrysler and GM advertising is now telling us how great the "new" companies are and everything is rosy once again. GM has many great vehicles available right now. Chrysler has virtually none and there aren't any on the horizon any time soon. Fiat can't have a car ready for sale in the US for at least 20 months so just how will that help? GM, on the other hand, has done nothing to earn the consumer's confidence. If they want to get folks back into the showrooms, some of which have stayed away for a whole generation, they should tell it like it is. GM should run ads that tell consumers: America, we apologize for our actions during past 15 years. During the 80's and 90's we built some pretty poor vehicles in terms of styling, quality and customer service. We fell in love with big trucks and sport utilities and each unit made us a lot of money. Our factories were cranking out Yukons and Tahoes like the golden goose. Our number one volume customers were the RENTAL companies. We gave them lower prices than even our dealers PLUS we agreed to buy all of them back after 6 months or a year of use. They could care less about styling or quality or resale value. We messed up so badly that now we have paid the ultimate price: bankruptcy.
The sad thing is that GM is building some world class vehicles right now. The Malibu, Vibe, CTS, Corvette, Camaro, Outlook, Lacrosse are some examples of what the GM design staff is capable of. What GM is ignoring, is the promise that GM dealerships must meet the most stringent service and business practice standards in the industry. Commit to the client who owns your product, GM. I don't think that this will ever happen. With the government calling the shots, client satisfaction will be at the bottom of corporate priorities. Have you driven a Ford lately??

Have auto makers kept pace with product improvements?

Well, it's official. The Feds announced a new nationwide fuel economy and emissions mandate for cars and trucks. While we certainly welcome vehicles that get better mileage, it made me wonder about just how eager the auto manufacturers have been to make it a reality. Virtually every product that we use evolves and improves over time. Here are some examples: the first computers that took up entire rooms and were as slow as a plow horse are now laptops. Cell phones. Remember the 5 pound milk carton that had a range of about 10 miles and the console models in cars? How much have they changed in 5 years? The television used to be a black and white 15 inch, tube blowing, temperamental monster. Today it's a flat screen mounted on the wall with a 50 inch screen! How much more efficient have home heating furnaces become? They are now smaller in size and use less fuel. Now let's take a look at the internal combustion engine. While it has certainly improved from the 1920's, it sure hasn't kept pace with its contemporary inventions has it? One could argue that fuel injection has really been the most outstanding improvement. Now don't get me wrong, between 1975 and 2005 auto emissions have improved by leaps and bounds. Did the brilliant folks that improved computers and cell phones have no counterparts in the auto industry? Makes you wonder, doesn't it? GM has developed one of the most dynamic new engines in decades. It is an all new design with nearly 35% fewer parts. It is a diesel V-8 that can deliver excellent fuel economy and meet the most stringent emission standards. In the US the word "diesel" does not equate with "normal". I read a comment from one of the lead engineers on the project. His hope was that his revolutionary design would be welcomed as a great ENGINE and not as just a low volume diesel. This engine was scheduled to go into production this year. In light of GM's financial problems and wonderful guidance from their new majority owner, the Government, the motor has been shelved! I'd like to hear from that design engineer today. Just makes me wonder what if??????

Chrysler shows no respect for terminated dealerships

As a kid I can remember getting excited when the UPS truck pulled up. This past Thursday, UPS brought envelopes to all of the Chrysler dealerships in the country. One said "welcome to the new Chrysler" and one said goodbye. Who knows, maybe they were even color coordinated or labeled like Publisher's Clearing House with the words "You may have WON!" Can you imagine pulling the zip cord on your UPS letter and finding your fate in a letter? The termination list was released to the media BEFORE some dealerships got their envelope. Dealerships were getting calls from clients informing the dealer that they were closing before the letter came! What a way to conduct business. Think about everything that a hometown dealership does for their community: tax base, employment, community service, donations, sponsorships and so much more. Great job Chrysler. You've got a great ally with the federal government telling you what to do despite having no automotive knowledge. I have a great friend who got the goodbye letter. He really put the situation into perspective when he said: "you know, I'm sitting in my dealership, still stunned from the letter. I had really expected the termination, but you know what? The new Chrysler is owned the the Federal Government and the send my letter via UPS! They don't even use their own government postal service to do their dirty work!" That says it all. You could have done it the right way with honor and dignity. Chrysler chose a scuzzy way to do business!!!

GM headed to Chapter 11?? Top execs sell all stock.

Expect GM to file chapter 11 bankruptcy in June. When many of your top executives sell all of their stock, the writing is pretty much on the wall! I just can't fathom the implosion of both Chrysler and GM. Is it possible that every ranking executive at these corporations was so out of touch with reality? I can give you a little insight. When I was a GM dealer, I had a district manager who became a high level member of the corporation. Even though he had become a big time exec, he continued to call me from time to time for what he called "REALITY CHECKS". He would always wonder what was happening in the real world, away from Detroit. I remember one call where he related how livid he was at a comment made by then Chairman Roger Smith. When Smith was asked how GM was going counter the announcement of the Dodge Neon, Chrysler's ill-fated attempt at making a quality, low cost small car, he made the following statement. " Our best competition for the Neon is a used Buick." How telling was that mentality? One could guess that the desire to saturate the market with high profit SUV's was the golden egg that GM thought would never cease to be. Oops. Reality Check Time. I never thought that I would ever witness that less than a 50 cent drop in the price of a GM share of stock would represent a drop of over 20% of its value! The sad fact is that it's going to get a whole lot worse before it gets any better. The Federal Government will see to that.

Will GM become Government Motors?

It's not very comforting to read that our federal government seems to think that they have the expertise and all of the solutions for General Motors. I'm sure that there is a lot of blame to go around for all that ails GM, but bureaucrats with no auto experience are NOT the ones who should be calling the shots. When will it all end? Chrysler is in turmoil and GM is in the on deck circle. The folks at Ford have to be thrilled that they turned down the bailout money with all of it's suffocating restrictions. I don't think that there is any doubt that Ford will become the strongest domestic automaker! It took a lot of pride for the Ford family to give control to an "outsider" and charge him with remaking the culture of the corporation. Mr. Mullally took the reins and rooted out the waste and the paralyzing multi-levels of management to make a product and consumer focused company. The "old Ford" kind of sounds like a description of Washington, doesn't it? And who thinks that they have the cure for Chrysler and GM? What model will they use? Stay tuned folks, the road for Chrysler and GM is going to get really rocky, real soon. I fear for the many quality Chrysler and GM dealerships across America. The majority of which have been family owned for generations. In most small towns, it's the local car dealer that provides community support in so many ways. From school sponsorships to the little league ball teams, dealership owners were always there to lend a pickup truck or a convertible for the homecoming parade. The reason for their very existence is now under the microscope. If the small town dealerships go away, it will be an extreme travesty. It just makes me shake my head in disbelief. Time will tell.

Penske to Rescue Saturn?

The word is out that Roger Penske is interested in purchasing the rights to Saturn! As a former GM dealer, I'm amazed at some of the decisions that GM and/or the government is making in order to make GM viable. Can you remember when thousands of Saturn owners would go to Spring Hill Tennessee for the reunions? Saturn was a "different kind of car company" and their clients were among the most loyal of any auto maker. GM took what really wasn't a truly outstanding product and sold them through a dealer body that had to adhere to some of the highest standards in the industry. Clients could feel comfortable walking into a Saturn dealership and not be attacked by a devious sales person. The price on the window was the actual price you would pay at any other Saturn store. Saturn was the exception to the stereotypical sleazy car dealership and Americans embraced the concept in droves! What the heck happened? Believe it or not one of the primary problems was sibling rivalry. Chevy, Pontiac, Buick and Oldsmobile all got bent out of shape at the attention that Saturn was getting and that included "exclusive" product from the corporation. Somebody was always whining "why does Saturn get the hot products?" The situation reminded me of the "BRADY BUNCH" television episode that has been seen over and over: "Marsha, Marsha, Marsha!" Remember that one? The result was that in order to please all of the other divisions, Saturn went into product withdrawals as the corporation ignored the responsibility of supplying Saturn with fresh and exciting new vehicles. Saturn got stale. It started Saturn's downward trend which spiralled until the recent revamped product line which is today among the best new vehicles offered by any manufacturer! So just when the product pipeline is filled with cars and crossovers that are critically acclaimed to be among the best built today, GM decides to pull the plug! Roger Penske sees the potential of a dealer body with integrity that can compete with anyone in the USA. If he can pull it off, this just might be a text book case that will be of historic proportions. I think he can make it happen! Time will tell.

Pontiac Motor Division

This is truly a sad day. General Motors, once the automotive leader of the world, has announced the end of Pontiac. As a kid from the sixties growing up in a Pontiac dealership, my world revolved around GTO's, Grand Prix's, Judges, 2+2's, Grand Am's, Super Duty engines, tri-power and Ram Air IV's. Pontiac was GM's bad boy division. The guys at Pontiac were like the television writers on the Smother's Brother's Comedy Hour; always trying to sneak something past the censors. In Pontiac's case, it was the 14th floor of the GM building. The creation of the entire muscle car era can be traced to 2 guys with a crazy idea of stuffing a big V-8 in a little car know as the LeMans. It's the car that almost never was. Today a concept like the GTO would never get past the hirearchy of the corporation. You didn't just own a Pontiac, it was an extension of who you were. When you pulled up in a bright orange GTO Judge Ram Air IV, everyone at the drive-in would take notice. It was a great run Pontiac. You were a true renegade. GM will now be know for Chevy, Buick, Cadillac and GMC. Who woulda thunk?