News: GM's chairman - "small cars don't work in this country"

[WaxyChicken]

^head on.

[elhigh]

"Small cars don't work in the US?" Really? Biggest car I've ever owned was a Caravan, and I was so glad to get rid of that thing I can't begin to tell you.

So, all those Scions and Corollas and Civics are exemplary of a sad, misled foreign manufacturer that just can't seem to figure out what it is Americans want? And all those millions of people driving them are just buying those little cars out of sympathy?

[owlafaye]

GM's refusal to produce an economical automobile this past decade is now hurting them badly. Had they offered a small economical car, even at a profit break-even point like some foreign manufacturers have done, they would have sold steadily, increased their in-house knowledge and set themselves up for the inevitable fuel short future. Bright management simply eludes (or avoids) GM.

GM's long range vision is not too acute. In addition, they have goughed the public for so long that now GM has lost that sterling reputation of the 50's and 60's. The 3 division concept (Cadillac-GMC-Chevrolet) and huge paring down of product offerings and manufacturing facilities... might save them...along with a government guaranteed loan... Lee Ioccoca did it with $1.5 billion...trucks & K cars ONLY. Paid it back in what? 18 months? laughter...

[dsq]

DETROIT -- The auto industry's race to develop more fuel-efficient and environmentally friendly technology is being driven mainly by the reluctance of Americans to buy smaller vehicles, says General Motors Corp. chairman Rick Wagoner.

"Small cars? We've tried that and it doesn't work in this country," Mr. Wagoner said yesterday. "It might work some day, but today it doesn't. People are simply not willing to make that radical a trade-off."

GM is now bankrupt thanks to Rick wagoner.
Guess what,rick wagoner is an idiot who cant run a company if his life depended on it.
GM is now a govt run program.They would have filed for chap11 if they hadnt received the 8billion$ bailout last month.And now they claim they need 50billion to survive past this year.Sorry GM is not a company anymore just a welfare program by any definition.

[owlafaye]

GM claims bankruptcy will not be followed by new financing to re-start the company...part of the LIE

Filing Chapter 11 will release them from pressing debt, allow them to re-negotiate labor contracts etc.

The financing will come...inevitable, and it will come predicated upon new management and an entirely revamped business plan based on economical and "green" vehicles...not to say profitable eco vehicles, but break even eco-smart vehicles built under the Chevrolet brand, and accompanied by profitable current designs: less economical, fully equipped sedans and such as before. No Pontiac, Buick or Oldsmobile. Cadillac will be luxury, convertible and sports cars only. GMC will be trucks and Suv's only. Model selections will be pared down to essential types. Plants willl be modified to new designs and many plants will be sold. Labor will have to settle for new contracts that pay substantially less than the $71/hour average pay (including benefits) now paid employees in plants. Dealerships will fail for certain...part of bad business is a lot of loss. Think of all the investors who have lost everything in GM stock investments! They will NEVER recoup their losses.

Chrysler eliminated Desoto and Imperial and eventually Plymouth. With just the one platform, one 4 cylinder engined, front wheel drive K car and standard Van & Pickup designs unchanged for many years, they managed to become very profitable...then Mercedes Benz ruined them and cast them out the back door. Chrysler now could take some lessons from their remarkable past of K car times.

By the way, I bought those vans and pickups every few years from 1974 to 1995, still have 4 of them...NOTHING essential changed in all those years. Same suspensions, windshields, windows, frames, brakes and wheels, power accessories, doors generally, engines, transmissions and certainly the rear ends. My God-awful 904 transmissions were tossed and 727-A's installed with 300,000 miles on them! for just the cost of a driveline shortening. 300,000 mile trucks are the result of staying with a good design and refining it.

We cannot afford to lose the auto making businesses in America today...our economy is still based on autos. Ousting executives and labor contracts, re-inventing medical and retirement plans that are more in line with what other Americans receive, catching up with the world auto technology, reducing the obscene luxury and frivolous unending variety of models and engines, choices and foolishness...that characterize an American auto,...is the only way.

[cfg83]

owlafaye -

Originally Posted by owlafaye

...

We cannot afford to lose the auto making businesses in America today...our economy is still based on autos. Ousting executives and labor contracts, re-inventing medical and retirement plans that are more in line with what other Americans receive, catching up with the world auto technology, reducing the obscene luxury and frivolous unending variety of models and engines, choices and foolishness...that characterize an American auto,...is the only way.

I think this article supports your POV :

GM Collapse at $200 Billion May Exceed Bailout Plan

Nov. 14 (Bloomberg) -- General Motors Corp., seeking a federal bailout as its cash dwindles, would cost the government as much as $200 billion should the biggest U.S. automaker be forced to liquidate, a forecasting firm estimated.

A GM collapse would mean "more aid to specific states like Michigan, Ohio, and Indiana, and more money into unemployment and extended benefits," Nariman Behravesh, chief economist at IHS Global Insight Inc. in Lexington, Massachusetts, said today in an interview. He prepared the estimate for Bloomberg News.

The projected expense of $100 billion to $200 billion covers funds for existing programs, such as unemployment insurance, and new measures that would be needed to revive economic growth after millions of auto-related job losses.

Such a sum would be an eightfold increase over the $25 billion bailout package that will be debated in Congress next week to help prop up Detroit-based GM, Ford Motor Co. and Chrysler LLC amid the industry's worst sales year since 1991.

...

CarloSW2

[dsq]

Originally Posted by cfg83

owlafaye -



I think this article supports your POV :

GM Collapse at $200 Billion May Exceed Bailout Plan
CarloSW2

I fully agree...The 50billion bailout is a lot acheaper than the 3million job losses that would result from the death of gm,ford...I also agree that once gm is bailed out that rick wagoner and all these loser ceo s need to be replaced or else these companies will blow the 50bil and nothing will change.
However how do you force in competent execs and how do you mandate green cars?This starts to sound a bit like yugo but i guess we have no alternatives to them going bust.

[zjrog]

I think every company that got a bailout should have all their senior officers replaced within 3 months. No parachutes, no bonus'... Why reward their failures. AIG should be held to to account for their sending their officers to resorts AFTER they received bailouts.

Chapter 11 would allow the automakers to renegotiate contracts or bust them completely. As much as wrong product destroyed the automakers, so did the union contracts.

[jamesqf]

Originally Posted by dsq

I also agree that once gm is bailed out that rick wagoner and all these loser ceo s need to be replaced or else these companies will blow the 50bil and nothing will change.

IMHO, that has to be a basic condition: before they get dime one, the upper management - the people that keep saying "small cars don't work in America" while steadily losing market share to foreign automakers who sell (guess what?) mostly small cars - have to be out the door, sans golden parachutes.

Then there have to be a few other conditions attached. No lobbying of Congress, no more claiming that they can't possibly get a fleet average of X mpg when the foreign competition is already doing it. No more TV ads showing 4WD SUVs tearing up unspoiled country. No more advertising at all for anything getting less than 20 mpg. And most of all, no more whining!

Congress needs to give them something, too: compatible standards between the US and Europe, so that they can build & sell the same cars in both places.

[bryn]

the only decent small car gm has sold were toyotas/ suzukis dressed down. maybe if they would try making their own, they could figure out how to turn a profit.