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GM's End --cut and pasted from Auto Extremist.com

May 27, 2009

Going, going, gone.

By Peter M. De Lorenzo

(Posted 5/27, 8:15AM) Detroit. It wasn’t just another company, no, far from it. It was, at its peak, the mightiest corporation the world had ever known, a juggernaut among mere mortal companies and a shining beacon of American industrial strength, resolve and leadership envied around the world. Now, General Motors, after an incredible slide to oblivion that no one could have predicted, is officially bankrupt.

How we got to this point has been dissected, discussed and downloaded for years now. I founded this website ten years ago on the premise of telling it like it is about this industry - as someone who was both lucky enough to be around and experience GM up close and personally in its heyday and one who was also around to witness the abject futility and stupidity of the “bad” GM while mired in the marketing trenches attempting to make a difference.

At its best GM was a monolithic corporate dynamo bristling with brilliant personalities and talent so deep that its bench could have easily led the other two domestic car companies in their spare time. From the late 50s through to the late 70s GM set the tone for the entire automotive world. It had some of the finest designers, the most gifted engineers, the most savvy marketing and sales people, and without question, the sharpest financial minds in the business.

GM dictated the operating cadence for the entire industry - from design to engineering and pricing to content - right down to the market segments created and even the color palette choices favored.

GM was so dominant that if it were analogous to a professional sports team they would be akin to the New York Yankees in their glory years. They didn’t just win championships; they won the championship every year. It was so successful as a corporate entity that at one point long ago elected officials in Washington were seriously talking about “breaking up” General Motors, because it had become too big, too powerful and too dominant.

But the world changed, and what worked for GM in its era of dominance became woefully obsolete and untenable in a new automotive world that didn’t put much stock in the past “glory days.” Detroit’s market share eroded right along with each new competitive entry from Europe and Asia that arrived on these shores, but GM, steadfast in its refusal to acknowledge that the world was changing dramatically around them, stuck to a game plan that was simply unworkable.

And at that point the “bad” GM took over, and we got to see the company at its worst.

GM took its eye off of the ball for the better part of two decades as its management became more and more complacent, unable to take their focus off of their painfully narrow-minded 30-day sales reports. And when they weren’t doing that they were building – except for a very few exceptions – bland excuses for automobiles that were engineered to the lowest common denominator and that were religiously benchmarked to their competitors' previous generation models, so that they fell further and further behind the curve with each subsequent year.

And while lost in their own little world pretending things would get better - and that a turnaround was “just around the corner” - an entire generation of customers who were turned off by the mundane choices and the shoddy, or better yet, nonexistent workmanship combined with a relentlessly piss-poor dealer experience simply walked away in droves, never to return.

On top of it the timeless adage of this business - It was, is, and always will be about the product - somehow got lost in the shuffle, and GM and the rest of Detroit simply either forgot about that simple premise or even worse, pretended it really didn’t matter anymore - while the import manufacturers handed them their lunch, month after month, quarter after quarter, and year after year.

And because of it traditional automotive reputations were destroyed for good and new reputations were created overnight and the entire domestic automobile industry became unglued.

And even still, GM - while grappling to slow the inexorable downward spiral of its plummeting market share - clung to its hoary divisional structure despite all evidence and rational reasoning to the contrary. The classically ingrained Alfred E. Sloan concept of “a vehicle for every purse and purpose” was brilliant when GM controlled 50 percent of the U.S. market, but it was flat-out disastrous with a market share that was deteriorating with each passing year.

I wrote about GM’s burden of too many models, too many divisions and too many dealers from Day One of this publication, but it was such a fundamental part of GM’s raison d’etre that the company’s paralyzed upper management and entrenched bureaucracy could never deal with it with any permanence or make even a substantive attempt at retuning its structure for a radically altered automotive landscape.

And it absolutely killed the company.

Even with this constant swirling maelstrom of negativity, there was more than a glimmer of hope for GM when former CEO Rick Wagoner hired the brilliant product guru Bob Lutz just after the turn of the century in a desperate attempt at fixing the moribund company once and for all. As I predicted, Lutz completely transformed GM’s product development function and reenergized its Design staff, and he willed GM to greatness again. Under Lutz’ tutelage a GM product renaissance began in earnest and a series of concept and production cars was unleashed that were simply some of the greatest the company had ever produced, even rivaling the very best from its illustrious history.

But in the end, it was simply too little, too late. The spike in gas prices a year ago killed off demand for large SUVs and trucks and that in turn destroyed GM’s last vestige of profitability. And that combined with the global economic meltdown last fall put paid to any chances of GM surviving as a thriving, independent company.

And so here we are.

Despite a glittering historical legacy that will never be duplicated again, the greatest American industrial icon of the 20th century is now flat broke and busted, a listless hulk smoldering by the side of the road.

General Motors, the once-majestic American symbol of success that in its glory days was a source of intense pride to its employees and dealers, even eliciting grudging respect from its most bitter of rivals, has been relegated to a punchline, staring at an ignominious future that has the UAW - of all things – owning 20 percent of the company and the U.S. Treasury owning as much as 70 percent of the rest.

A living, breathing corporate entity of some note may emerge from the wreckage at some point down the road – although I for one have very serious doubts about that - but the General Motors that once was has now officially been relegated to the history books.

An inglorious end indeed.

Thanks for listening.
 

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Warranties will be upheld just like they are doing with Chrysler Im sure.
 

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From a Reuters story today

GM shares, which could be worthless if the automaker files for bankruptcy, were down 25 cents or 17.4 percent at $1.19 on Wednesday. The shares have traded in a 52-week range of $18.18 to $1.00.

Over the past decade, GM's collapse has taken down an icon of American industry, burned billions in paper profits for stock investors in a formerly safe blue-chip name and cost tens of thousands of middle-class jobs.

In 2000, shortly after former CEO Rick Wagoner took over, shares of GM peaked at $75. At that time, the automaker employed more than 146,000 factory workers.

After a concessionary UAW contract up for ratification on Wednesday and Thursday, GM's factory payroll could drop to near 33,000 workers.


WOW, from 146,000 to 33,000 in 9 years.

And WOW - WOW, stock price from $75.00 to $1.19


The rest of the story: http://finance.sympatico.msn.ca/investing/news/breakingnews/article.aspx?cp-documentid=20035117
 

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My neighbor (83 years old) said years ago when GMAC started financing houses, "That will be the end of GM, they sell cars and they should stick to that"....Funny, maybe not the full reason, but in a way, he was right.
 

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Author forgot to mention 1980's CEO Roger Smith, who singlehandedly started GM down the slope of destruction. He was the ultimate bean counter who assumed that cars were no different that widgets - the exact opposite of Bob Lutz who, unfortunately, arrived too late to rescue the company.
 

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Looks like Canada's Magna International will pick up GM's Opal and Vauxhall units

Here is the story:

Canadian auto-parts supplier Magna International Inc. was selected by the German government early Saturday as a partner for General Motors Corp.'s Adam Opel unit.
The prospective deal for GM's European operations would mark a major breakthrough for Magna and its flamboyant founder, Frank Stronach.
View Full Image



AFP/Getty Images Magna founder Frank Stronach talks to journalists Friday in Berlin.






Speaking after marathon talks in Berlin that yielded a tentative deal between Magna and GM officials, German Finance Minister Peer Steinbrueck said his government agreed to provide about €1.5 billion ($2.09 billion) in interim loans while Magna and GM finalize the contract.
Mr. Steinbrueck also said the parties involved agreed on a trusteeship for Opel in order to isolate the European operations from GM's expected bankruptcy proceedings.
German Chancellor Angela Merkel had made both that isolation and a preliminary agreement to buy Opel her conditions for German financial help.
Magna is partnering in the bid with Russian auto maker OAO GAZ Group and state-controlled OAO Sberbank. The company aims to purchase GM's Opel and British Vauxhall units, as well as Chevrolet's business in Russia.
If the deal is completed, Mr. Stronach would achieve one of his long-sought goals -- to turn Magna into an auto maker in its own right and not just a producer of parts and an assembler of vehicles for other companies.
 

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Discussion Starter · #11 ·
I am glad that Magna got Opel rather than Fiat. Magna is a very powerful, well run company with a lot of engineering talent. Would not be suprised to see the leftover assets like Saturn and Pontiac get absorbed by Magna, or even a merger with GM itself once the smoke clears and the government decides it needs to be out of the car business
 

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Author forgot to mention 1980's CEO Roger Smith, who singlehandedly started GM down the slope of destruction. He was the ultimate bean counter who assumed that cars were no different that widgets - the exact opposite of Bob Lutz who, unfortunately, arrived too late to rescue the company.
Bob Lutz is just as big an idiot as the rest of them. He had all these "great" ideas, yet none of them amounted to piss in a shampoo bottle. One example; the GTO. Great car, great idea, however, the launch and marketing of the car was utterly ridiculous and handled extremely poor. Along with dealer markups it was the beginning of it's poor sales. (won't even mention turning around and adding all the wanted features the SECOND model year, less than 10 months later).
 

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Warranties will be upheld just like they are doing with Chrysler Im sure.
My understanding is that the warranty issue is still being fought. Chrysler wants to be absolved of responsibility for previous warranties. I heard a small blurb on the news last week that GM intends to pick up all previous warranties, or at least that's supposed to be part of their agreement with the government. I'd like to see it in writing though. As far as I understand how this works is that as of this morning, our warranties aren't worth the paper they are printed on. I'm betting that dealers will refuse warranty work until they know for sure they'll get their money back on that work.
 

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it'll be a sad sad day when an industrial giant like gm dies. I have been a faithful gm owner most of my life. i hope they make a comeback and this is all just a bad dream...i mean if they fall off what am i supposed to do then??? BUY A FORD??? YEAH RIGHT!!!! japan hasn't mastered trucks nor do i think they are worth a f*** as a truck anyway. they are good at making long lasting little putt-putt cars with 7.3 horsepower. what do they know about a good truck? yeah sure they actually produce trucks but come on put a honda ridgeline up against a sierra 3500, not gonna win that one. the only truck to come out of japan that is in any way, shape, or form an actual truck is the titan. but you can't get it in a diesel, dually, or anything but pussified. When it comes down to it they CAN NOT hang with gm there fore I really hope GM makes a comeback cause I like my trucks to be manly beastly and powerful.

Thank you for letting me rant and rave, and thank you for reading it...lol
 

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it'll be a sad sad day when an industrial giant like gm dies. I have been a faithful gm owner most of my life. i hope they make a comeback and this is all just a bad dream...i mean if they fall off what am i supposed to do then??? BUY A FORD??? YEAH RIGHT!!!! japan hasn't mastered trucks nor do i think they are worth a f*** as a truck anyway. they are good at making long lasting little putt-putt cars with 7.3 horsepower. what do they know about a good truck? yeah sure they actually produce trucks but come on put a honda ridgeline up against a sierra 3500, not gonna win that one. the only truck to come out of japan that is in any way, shape, or form an actual truck is the titan. but you can't get it in a diesel, dually, or anything but pussified. When it comes down to it they CAN NOT hang with gm there fore I really hope GM makes a comeback cause I like my trucks to be manly beastly and powerful.

Thank you for letting me rant and rave, and thank you for reading it...lol
ever been in a Toyota Tundra? They are very nice trucks. Good hp and ft lbs pretty quick. before i converted my dad into a gm guy he had an 06 tundra and that thing hauled. took a dodge hemi no prob! and from what i heard they were coming out with more "work truck" type of trucks in a acouple of years.
 

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Discussion Starter · #19 · (Edited)
ever been in a Toyota Tundra? They are very nice trucks. Good hp and ft lbs pretty quick. before i converted my dad into a gm guy he had an 06 tundra and that thing hauled. took a dodge hemi no prob! and from what i heard they were coming out with more "work truck" type of trucks in a acouple of years.
When I worked at GM Fort Wayne assembly where they build full size Pickups we had a new tundra for acouple of days. It can not stand up against a GMT 900....yet..I stress yet. It is scary when you think it was Toyotas FIRST real full size pick up they ever designed. The next one will be much better.

What is really bad is that Messrs:, Troy Clarke, Gary Cowger and Jim "Alfalfa" Queen are still at GM. They all should have been fired and Rick Wagoner could have stayed. Instead he was the fall guy, and basicly is a good guy. Made some real bad decisions.

Now that pack of losers are on 30 Billion US taxpayer life support. Anyone who is rooting for the "New GM" b4 that management pack of thieves is replaced is a fool. The company cannot succeed until they and all those they put in place are gone. Then the "New GM" and all its fine employees, both management and UAW can succeed.

The NEW GM --BS-- its being run by the same pack. Dont shed any bull crap tears when u see the touching commercials or think they will be the Phoenix rising from the ashes. Troy Clarke, Gary Cowger and Jim "Alfalfa" Queen must go. Why should we as taxpayers pay and they get their 5 million salaries???

This is bad!
 
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