New sh** has come to light!

[from Jalopnik.com, commenting on Rick Wagoner's demise]:

JackMaz got wagon fever
7:37 PM on Sun Mar 29 2009

@nhubbell84, morphing to ThreeLitre: I've got information man! New s&it has come to light! And s&it... man, he arranged it himself. Well sure, man. Look at it... a failed exec, in the parlance of our times, you know, and GM, uh, uh, owes money all over town, including to the Treasury and taxpayers, and that's cool... that's, that's cool, I'm, I'm saying, he needs money, man. And of course they're going to say he didn't get it, because... he wants more, man! He's got to feed the monkey, I mean uh... hasn't that ever occurred to you, man?

Mr. Wagoner has left the (shabby) builidng

Lots of news today. Check back for more.

First of all, godspeed, Rick Wagoner! In case you haven’t heard, Rick was shown the door by one of President Obama’s auto industry group folks, and will resign, as evidenced by this quixotic email:

“GM Message from Rick Wagoner
On Friday I was in Washington for a meeting with Administration officials. In the course of that meeting, they requested that I “step aside” as CEO of GM, and so I have.

Fritz Henderson is an excellent choice to be the next CEO of GM. Having worked closely with Fritz for many years, I know that he is the ideal person to lead the company through the completion of our restructuring efforts. His knowledge of the global industry and the company are exceptional, and he has the intellect, energy, and support among GM’ers worldwide to succeed. I wish him well, and I stand ready to support him, and interim Non-Executive Chairman Kent Kresa, in every way possible.

I also want to extend my sincerest thanks to everyone who supported GM and me during my time as CEO. I deeply appreciate the excellent counsel and commitment of the GM Board and the strong support of our many partners including our terrific dealers, suppliers, and community leaders. I am grateful as well to the union leaders with whom I have had the chance to work closely to implement numerous tough but necessary restructuring agreements.

Most important of all I want to express my deepest appreciation to the extraordinary team of GM employees around the world. You have been a tremendous source of inspiration and pride to me, and I will be forever grateful for the courage and commitment you have shown as we have confronted the unprecedented challenges of the past few years. GM is a great company with a storied history. Ignore the doubters because I know it is also a company with a great future.
Rick Wagoner “

Ignore the doubters? Um, dude, one of the doubters just fired you. It’s sort of like you’re saying “ignore those guys over there who are accurately and truthfully assessing our company’s ill health.”

Anyhow, the buzz around the industry has mostly centered around how Mr. Wagoner is viewed as some sort of sacrificial lamb on the alter of accountability, but as the NYT points out, Wagoner has presided (their word) over probably the worst period in GM’s history ever. I applaud the decision to oust him, and I’m hoping that new blood will ease the transition to a smaller, leaner, and more competitive GM.

UPDATE: GM asks for an additional $12B

No, you’re not missing a period in-between the 1 and the 2. That’s t-w-e-l-v-e billion dollars on top of the $18B they already wanted. If they don’t get it, they’ll run out of cash by March, and might have to consider bankruptcy.

Look, I’m not happy about this at all. GM employs lots of folks who happened to live in this country (and Mexico, Canada, and South Korea). And a bunch will get laid off, and almost all with see a reduction in the health benefits and other perks they were promised. Which totally sucks. You shouldn’t have to shaft the little guy, especially considering the state of healthcare in this country.

I totally blame the UAW. I am usually a pro-labor person, but in my mind the UAW represents everything that is wrong with unionization. Why is that relevant to GM’s woes? I mean, certainly GM has done a lot to dig it’s own grave, with enough brands/models competing with each other, and enough management to make the combined bureaucracy of Europe look streamlined. But the UAW has apparently bludgeoned the industry into accepting insane “legacy costs.” Which is a fancy way of saying, we’ll promise all sorts of benefits, to be paid off in the future, betting on great sales and market dominance. And it’s falling apart like Bernie Madoff’s ponzi scheme (which is exactly how I view the situation).

The taxpayer ends up with a lot of the burden for the mistakes of private enterprise. That makes me really angry. If GM achieved “parity” with the cost and benefits of other sectors in the US (including the domestic workers for foreign automakers), and stood up to the UAW, they’d be in an arguably better position, and you, Joe or Jane America, wouldn’t be worrying how much of your tax dollars are cleaning up the mess.

OK, in case you can’t tell, this turned into a full-blown rant as I actually thought this whole thing through. I actually hope it riles you up too, because it should.

[Source: NYT, pure unadulterated anger]

Slimmin’ Down: Automakers to submit plans to Treasury

In many ways as unsurprising as it is incredible, the details of GM and Chrysler’s plans to redo their business models is going to be submitted to the Treasury Department today (Ford did not take money from the Feds, so they don’t have to submit a restructuring plan). Apparently, GM is going to slim down to just 4 brands, from the 8 they currently sell in the US. The list is:

1. Chevrolet
2. Buick
3. GMC
4. Cadillac

What’s missing from the list? Some of the brands were expected to be cut, notably Saab, Hummer, and Saturn. But Pontiac!!!

Pontiac has been the sporting face of GM for a long time, despite mostly not living up to the image. Other GM brands, with their own management and agendas, produced their own sportscars, reducing Pontiac to sort of a façade. Take the Chevy Corvette and Camaro. Pontiac got a version of the Camaro, the Firebird, for pretty much the entire life of the car. But the Corvette was the halo car for GM, and it was a Chevy, so Pontiac could never meet or exceed the performance of that car.

This is despite the fact that lately, there was some thinking that Pontiac would become a specialty, sportscar-only brand, making cars along the lines of the Solstice, G8, and the GTO exclusively. However, that’s also a little hard to believe when you consider the introduction of this monstrosity, the Pontiac G3, which is a rebadged version of that old GM favorite, the Daewoo Kalos/Chevy Aveo. Talk about mixed messages! What about the Kalos/Aveo is sporty?

So after my initial shock (“no, don’t kill the General’s sportscars!”), I’ve realized that Pontiac is just as warped and off-message as any brand at GM. Like Saturn, the brand-image has been tainted, and maybe it deserves to die to allow GM to start focusing on not competing with itself.

[Source: NYT]

I’m not sure whether to be flattered or insulted: the Chevy Spark

OK, it’s no Maserati. In fact, it’s a Daewoo. GM owns Daewoo as a company that is called, unimaginiatively, GM Daewoo. It’s best known product in the US is the Chevy Aveo, which is sold as the Daewoo Kalos overseas.

The Spark is a badge-engineered version of the Daewoo Matiz, and is styled after the Chevy Beat concept. It’s been expected for a couple of years now, but it will only be sold in the US starting in 2011. Of course, GM could really sell models like this in the current economic Chernobyl, so I’m not really clear why they haven’t rushed this thing into high gear to push them onto US saleslots ASAP. I guess GM knows better.

Yeah right.

But anyhow, even though the Aveo is possibly the most awful car ever conceived outside of the Soviet sphere of influence, they sell a lot of them. So the even smaller and more efficient (theoretically) Spark should appeal to a lot of folks. If you have a genetic condition that prevents you from discerning between pleasing and unpleasing design elements, and you are in the market for a cheap car, this might be the one …

[Source: Autoblog]

Pull the Plug Already! Saturn wheezes on until at least 2012

It’s going to sound cliché, but bear with me. Imagine a company’s finest hope, a scrappy contender with a unique style and inspiring philosophy, poised to take on the complacent and omnipresent foreign thugs. Launched with great fanfare and a lot of optimism, Saturn moved an impressive amount of cars early on. (Let us ignore the fact that they were kind of tinny and, without some really impressive marketing to gather up a loyal fanbase, probably would have shuffled off to oblivion.) They were scrappy, and managed to convey a lot of messages into a rather pedestrian package. But hey, the attitude was there, the hype was there, lots of fans wanted to buy more Saturns, and they wanted to tell all their friends about it.

And … (insert a foreshadowing, dejected look or sound) … GM completely, totally screwed it up.

Talk about resting on your laurels. GM sat on them so long they were implanted in GM’s butt. GM sat on their product (the SL1 and its derivatives) for ELEVEN years with no real significant changes. Dear lord, how can I convey how long that is in car terms? That’s like, everyone starts out as an amoeba in a primordial mud puddle, and while Saturn was waving their flagella around aimlessly, Honda, Toyota, even Hyundai were striding about on land, inventing advanced rockets and string theory. They also formed a club that Saturn wasn’t invited to, and made fun of it. (No Saturns Allowed!)

When someone at GM (I’m imagining a Rip Van Winkle character popping up from a drafting table suddenly, looking around, and crying “oh no! I’ve slept too long!!!!”) finally woke up and wiped the drool from their design table, Saturn was totally screwed. It was too late to catch up by developing their own products, so they started shopping around the GM portfolio and grabbing vehicle platforms from other companies (mostly Opel, GM’s German brand). In doing so, they lost their character completely despite (finally) having good cars in the lineup. With no unique character or philosophy, it was just another GM brand selling a mismatched hodgepodge of cars.

So there has been a lot of speculation about Saturn going the way of the passenger pigeon. Or the marsupial tiger (which were totally RAD, too bad they’re extinct). But anyways, GM has announced that it will linger on in painful agony until at least 2012. Tellingly, they leave it open-ended whether it will survive past that. They might just be buying time to pull the plug.

[Source: Detroit Free Press]

On Top of the Pile: Toyota is now world’s largest automaker.

[insert: "I for one welcome our new ____ overlords" meme here ...]

I can’t believe I didn’t post to mention this. It’s pretty simple. GM, the world’s largest carmaker since the 1930s, was outsold in 2008. GM sold 8.35 million vehicles to Toyota’s 8.97 million.

It’s not surprising in the least. Toyota has been expected to pull ahead of GM for a long time, considering that GM has subsisted for at least 50 years on lazy and regressive business practices, marketing flops, and convincing Americans to buy huge cars and trucks. Toyota, meanwhile, has a business model that is widely emulated in the corporate world. And they sell darn good cars. (OK, they’re a little boring, but the Corolla is the best selling car nameplate in history, and they sell most of their cars like hotcakes. Or at least they did before the economy went in the drink.)

(Source: New York Times)

President Bush Authorizes Auto Bailout Package!

The New York Times (and other sources) just reported that President Bush just authorized a bailout package for GM and Chrysler to the tune of $17.4 billion. I'm still trying to process the details, but this does NOT look like the "soft-landing bankruptcy" plan that newspapers and blogs were talking about yesterday, which would have basically been government supervision in restructuring the companies. It also looks like all of the government oversight and company requirements have been watered down a bit. I’m afraid this will let the companies muddle along for a while longer without really changing anything much. Basically, GM needs to slim down, and they seem incapable of shedding brands or models. Will this money make them do what they have been unable to since the dawn of time? I sure hope so.