UA-8086277

Home » Auto Manufacturer » Recent Articles:

Is GM Old Board Guilty of Corporate Mismanagement and Can the New GM Board Save the Company?

October 2, 2009 Auto Manufacturer No Comments

GM Is A Lost Vision

I remember watching GM CEO Roger Smith in a GM Corporate Teleconference in 1984 or 1985 indicating that GM had committed the necessary resources to set up Saturn and the research of Alex Maier that supported the idea.

At that time, in the mid 1980’s GM had about 50% market share and Oldsmobile sold about 1 million cars per year. Today’s sales are about 10 million units annually so using these numbers the Oldsmobile 1/10 = 10% of total sales. This is bad math, but it illustrates a point. Recent year sales have been about 16 million units so 6.25%.

Will the New GM Survive

On a very somber note GM will get smaller than anyone imagines, now that GM has gotten past the bankruptcy chaos. It is our assessment that in three years GM will be smaller than Ford and about the size of Honda.

GM Market Share Falling

Currently, GM talks about maintaining 19% of the U.S. market, but that’s not going to happen. Before bankruptcy, in the first four months of 2009, GM had 19.2% of the market. Car divisions to be shut down include Pontiac, Saturn, Hummer and Saab representing 2.8 points, which calculates to 16.4% remaining.

Continuing the calculation let’s look at Buick-Pontiac-GMC where Pontiac accounts for one-third of their sales.  A second factor are fuel prices that will increase and third, EPA MPG requirements that will increase all combine to hammer GMC’s pickups and sport utility vehicles which means that GMC will see a sales decline.  Today’s market share is 13% for Chevy and Cadillac.  Projecting forward would be to take the 13% add in GMC & Buick and then adjust the numbers ahead 3 years. This is a sobering calculation which leads us to believe that GM will be about the size of Honda in 3 years.

GM Corporate Mismanagement

At that GM teleconference I was thinking about a statement made by a regional Division Manager of Oldsmobile anyone that messes with Oldsmobile is crazy. GM Corporate starved and neglected Oldsmobile and the entire GM product line.

The Automotive Tribune does not have an attorney on the staff but in our assessment it certainly seems that this type of GM Corporate Neglect in the Boardroom and CEO Corner Office represents a Civil Crime. GM’s Board of Directors (with a few exceptions who raised their voice and were shown the door) were dead to the reality of what was going on.

Was GM’s Board Guilty of a Civil Crime

That question can only be resolved by a Jury. As a Car Guy your Tribune Editor is of the opinion that the Jury would come back with the Decision that the GM Board was Negligent in their Responsibilities.

If the Jury questions were expanded to include Selected GM Corporate Officers that would prove to be really interesting. The Late Roger Smith was recognized as #13 in the CNBC list of Worst American CEO’s of All Time. … Continue Reading

Saturn Car Division To Close

October 1, 2009 Auto Manufacturer No Comments

All Saturn Dealerships Will Close

October 1, 2009 news wire and media reports that the GM Saturn Car Division will close.  Early information indicates that Roger Penske backed out of the deal at the 11th hour becasue of vehicle supply problems associated with Renault.

Shocking News

This is shocking news to the franchise dealerships.  Penske had been heralded as the modern day savior of the brand.  With the deal falling apart that some deals are impossible to bring together.

A Dealer’s Comments Revisited

Saturn Dealer SignI spoke to a multi-car-line dealer several months ago.  He expressed concerns about where Saturn was going but indicated that with Penske on board that the franchise would be a focused success. 

Harsh Reality

Reflecting on what this dealer said is indicative of the vision that many dealers had.  It is reasonable and realistic to think this way but the hash reality of what has happened means that more dealerships will close.

What is the Reality?

Closing dealerships have been addressed in the Automotive Tribune including Megadealer Bill Hurd to the Typical Hometown Dealership.  Saturn stores are unique since the first cars did not come off of the production line until July 30, 1990. 

Some of these dealerships represent newer facilities with millions of dollars of debt service.  With the Penske deal off the table GM will reassess what they pay the dealer to close.  It is unlikely that any dealer can be compensated for their loss.

Eastern European Classics

September 14, 2009 Auto Manufacturer No Comments

The Eastern Europe Classics

By Dejan Dramicanin

This article gives comprehensive overview of Eastern Europe car classics. The cars from the list are sorted randomly.

Volga

 

Volga GAZ 24

GAZ-24 Volga

Author’s comment:

Volga was Russian for higher status. Produced from 1956 to these days, most popular revision is GAZ-24 (1970 – 1985). In version with 5.5L V8, 3-speed automatic gearbox, and black paint, it was KBG agent car of choice. Standard setup 2.5L I4 was known for brutal fuel consumption.

Lada NIVA

Lada NIVA

Author’s comment:

Lada NIVA is the best mini SUV in the world. It is produced since 1977 without any changes because it is simply perfect. This is excellent car if you need robust, real off-road vehicle. Older NIVAs have 1.6L petrol with carburetor and newer have 1.7L Opel engine with fuel injection, and there is variant with 1.9L diesel from Peugeot, all with full-time 4WD. I have never heard that someone complaint about this car, and because of exceptional center of mass it is simply unbelievable where this car can climb! With 1.7L engine and factory installed natural gas, NIVA costs less than $10k.

FSO Polonez

FSO Polonez A

Author’s comment:

I put this car on the list because it is always considered as ugly and poor performing – the karma unjustly generalized for eastern Europe cars. Name Polonez given after swift Polish dance polonaise, rounds up the nonsense of its existence. Production started in 1978, and finally ceased in 2002 because FSO was not able to withstand competition of Western cars in the same price range (for example: used, 15 years old VW Golf mark 2).

Zastava 101 Advertising PhotographZastava 101

Author’s comment:

The Zastava 101 is car built by Serbian car manufacturer Zastava, based on Fiat 128 sedan platform. The car was in production from 1971 to 20 November, 2008, with 1.3 million units sold. In 2007, it estimated that Zastava 101 was the world’s second most affordable car. This is car of my childhood, since my family had one in period from 1976 to 1984. The 101 can be seen in all generations across Eastern Europe, it is solid and inexpensive. I had chance to try many of them, and in compare with today’s car with “synthetic” driving feeling, I find driving 101 interesting since reactions of the car are with a lot of feedback. Zastava 101 remains legend in Serbia. The most usual engine is 1116 cc 55 HP.

… Continue Reading

GM — The Clock Is Ticking

September 8, 2009 Auto Manufacturer No Comments

Not Business As Usual

gm-logoThe GM Board of Directors will meet on September 8 – 9, 2009 and this certainly appears to not be the same old “ribber stamp” from the Board.  The Wall Street Journal had a very significant article about ChairmanEdward E. Whitacre, Jr and his no-nonsense approach to the basic business of GM.

Sell Cars, Keep Market Share, Make A Profit

The basic business of GM, in the simplest of terms, includes selling cars, keeping and increasing market share, and making a profit.  These are the most basic of business issues.  For the past 30 years, GM has has been a failure on all points, a fact that has been addressed in the Tribune.

Boardroom Direction

Serving on a Board of Directors affords the Director an opportunity to participate in strategic decision making for the Company.  If the Company runs into a wall or loses direction the Board has responsibility.  If the Board is apathetic or follows directions from the Company Management then the Board has given up control.  This terrible condition has been in place at GM for so long that the Board became a “rubber stamp” for Company Management.  This terrible condition of Boardroom Apathy has permitted GM to crash.  Jerry York served, arguably as a dissident Board Member, on the GM Board and made a notable presentation at the Society of Automotive Analysts’ 18th annual Automotive Outlook Conferencein Detroit on January 10, 2006.  This transcript provides an intuitive insight into the domestic and international manufacturers.

Tough Talk From Mr. Whitacre

The WSJ reported that Whitacrewas going to push GM and the Board.  One particular statement is paramount today.  ‘”He’s said to us that ‘you’ve been given a clean balance sheet, now apply the same focus to market share and sales,” said one person familiar with Mr. Whitacre’s views.’

Boardroom Deadlines

GM plans to have a public offering to sell stock in about 12 months to pay back part of the $50 billion the US Government has given it.  For this to successfully happen there must be a successful business plan must be implemented immediately.

Public Relations Are Paramount

Above all GM must have a PR campaign that communicates the strengths of the Company that was in bankruptcy for 40 days.  Financial analysis in addition to the common investor will look at the GM stock offering very carefully.  If GM is to be successful then they must put a positive spin on what is going on, in addition to getting people to buy their current product line.

Action Now

GM must get the car business right and they must do it now.  The seriousness of what is happening now cannot be underestimated.

Dictionary of Automotive Body Terms

August 29, 2009 Auto Manufacturer No Comments

Automotive Body Terms

Every automotive professional has been challenged by their lack of knowledge regarding this particular terminology.  Complications arise when the same parts and sub-assemblies are referred to with different names even if everyone speaks English.  Furthermore, every automotive technical professional has been frustrated by their lack of knowledge of automotive terminology.

Not only does terminology vary world-wide for assemblies and sub-assemblies among countries but from manufacturer to manufacturer a fact which is also evident when analyzing GM, Ford, and Chrysler that respectfully reside in Warren, Dearborn and Auburn Hills, Michigan.

  • Backlight – glass in rear window opening
  • Belt Line – lower boundary of the side window daylight opening (DLO)
  • Black Box – a design, development, and build program that a supplier completes with almost no supervision by the car company (combined radio and sound system would be an example of this type of program).
  • Body-in-White – bare metal shell of the body including doors and deck lid prior to paint and trim
  • Boot – folding top storage area (convertible).
  • Center Pillar – box construction used on four door bodies forming the front door body lock pillar and rear door body hinge pillar.  Also known as the “B” pillar.
  • C.K.D. – completely knocked down or disassembled.
  • Crease Line – discernible line in body exterior skin caused by abrupt change in surface.
  • … Continue Reading

Motors Liquidation Company = The Old GM

August 26, 2009 Auto Manufacturer No Comments

Motors Liquidation Logo

Motors Liquidation Company

Motors Liquidation AGM filed for Chapter 11 Bankruptcy on June 1, 2009 and GM officially changed its name to Motors Liquidation Company.

On June 1, 2009 Motors Liquidation Company (formerly General Motors Corporation) and certain of its subsidiaries filed a voluntary petition seeking relief under Chapter 11 of the Bankruptcy Code.

For bankruptcy court documents, please visit www.motorsliquidationdocket.com.

If you are accustomed to looking at the GM stock price you will find Motors Liquidation at MTLQQ

Some Not So Fine Print … Continue Reading