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

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

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

I 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.

Motors Liquidation Company = The Old GM

Motors Liquidation Company

GM 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

You Can Communicate With GM

You Can Communicate Directly With GM

GM has set up a web site link where you can actually communicate with CEO Fritz Henderson.  This web site provides a “Corporate View” for GM at www.GM.com and drilling into the site gets to Mr. Henderson’s direct link and includes contemporary videos with his message, vehicles coming on-line now, and a very significant video with the pilot build for the Volt.

Is This Significant?  Yes!

Auto manufacturers are elusive.  Communication of any type to the auto manufacturer is always filtered, diverted, re-routed, and potentially a waste of time.  However, one good thing that has come out of the Structured Bankruptcy is that GM is now more transparent. 

Spend a few minutes with this site.  You will see an openness that has never been in place before.  Will this last?  Is this just a bunch of “smoke and mirrors”.  Who knows???  But, for now there appears to be a realistic effort for communication.

As a follower of the Tribune if you have some success or failure of the GM Link let us know.

Bob Lutz Has A New Role

GM’s “Car Guy” Will Not Retire

Bob Lutz will continue to have an active role in the New GM.  This is important news 

The Lee Iacocca Model

GM because Lutz is the one guy that absolutely delivers and his new role will be to Deliver GM to the customer!

What exactly will Bob Lutz new role be … well that seems to be unclear.  However, what is clear is that A) his strong character type and B) USA’s need to be comfortable with GM.  Putting together A & B results in a classic Lee Iacocca that can be the voice of the New GM.

If you can find a better car then buy it … in the best of Lee Iacocca.

GM and America need Bob Lutz.  He is the one leader that can deliver comfortability and quality assurance for GM.  We will all be watching for the media update.

Motor City Challenge: “Failure Is Not An Option”

Motor City Challenge: “Failure Is Not An Option”

GM Entering Bankruptcy and Chrysler Poised to Exit

Reading the Wall Street Journal or watching the nightly news makes it seem inevitable that GM will enter bankruptcy soon.  This is not an unexpected event as reported in the Tribune over the past months.  Chrysler appears to be on the verge of coming out of bankruptcy, and this is one fast trip in and out!  GM is too complex for a speedy journey like Chrysler.

Deadly Symbolic and Deadly Serious

In some ways this is symbolic and in some ways it is deadly serious.  Looking at the deadly serious side GM absolutely must be re-cast properly for the good of the US and all of North America if you take the proposition that GM is worth saving and the Tribune takes that position.  However, re-casting GM is not simple from the business plan side of the equation and it is imperative that the new business plan must “hold water” otherwise the entire Government assistance plan is flawed.  The New GM absolutely must have a viable business plan.  … Continue Reading