In the old fairy story, con men convince a naked sovereign that he’s wearing fine clothes. Applying that cautionary tale to General Motors is not as straightforward as it seems. Is GM CEO Rick Wagoner aware that the enormous automaker is tumbling towards bankruptcy? Or is he living in a dream world, demanding that his "kingdom" admire his invisible finery? Whether Wagoner’s deluded or deluding, his ”GM Statement on Turnaround Plan” indicates that GM is still buck naked.
"We're delivering on the turnaround plan we established in 2005, and have exceeded expectations on virtually all counts," Wagoner proclaimed.
Welcome to Wagoner’s world, where you can announce that you’ve exceeded your expectations without revealing them. In truth, Wagoner has never set hard targets for GM’s recovery. Not sales. Not market share. Not even a return to profitability. If GM doesn't say where they’re going, why should we believe they’re getting there?
Even a brief look at GM’s declining sales, lost market share and red ink-stained balance sheet reveals that Wagoner’s a legend in his own mind. GM’s decline is a trend that started before the unspecified 2005 “turnaround plan,” that’s continued unabated since its implementation. But never mind that, because “We've set a strong foundation that we can truly build on. We're encouraged by our progress in revitalizing our product portfolio, strengthening our brands, reducing structural cost and growing the business globally.”
Hang on; a few well-received products do not a turnaround make. For one thing, the Chevrolet Malibu, new Cadillac CTS and Lambda-based Crossovers may be media darlings, but none qualify as a runaway sales success. That's especially true as The General screwed-up the supply chain for all three cars, leaving dealers SOL. Lest we forget, GMNA is still juggling eight brands and 49 products (not including discontinued models still for sale or variants). Even if you spot GM five hit products, well, you do the math.
And while we’re at it, GM’s product portfolio is still truck-heavy in an increasingly truck-aversive domestic market. Using the EPA definition of a truck, 28 of those 49 products qualify. That’s 57 percent. Trumpeting the fact that [some of] the vehicles within GM’s product portfolio are “revitalized” is equivalent to boasting that you made a perfect three-point landing at the wrong airport. And that’s without questioning GM's trucks' diminishing profitability.
But we’re really off in “admire that naked man’s clothes” territory when considering Wagoner’s assertion that his administration has strengthened GM’s brands.
Chevrolet is gas-friendly to gas free (if you consider a diesel pick-up “gas free”), but it still sells everything from a rebadged Korean econobox to a $60k sports car without any unifying concept. Saturn asks potential buyers to “Rethink” without giving them anything coherent to think about. Cadillac, the supposed standard of the world, lacks a credible flagship– and looks set to fall further down market. What is a Saab? Does anyone care? Near-luxury Buick is near death (unless you’re in China). Buick's most aggressive competitor, GMC, is re-positioning itself as an upmarket Chevy. Which is what again?
Pontiac is in a Holden pattern, repositioning itself as an importer of rebadged Australian rear wheel-drive sedans. Meanwhile, it sells a farrago of rebadged Chevies (which is what again?), a couple of Toyota and Saturn homonyms and… the Grand Prix. Of all GM’s eight brands, weak-selling Hummer is the strongest; albeit one that’s a politically or gas conscious buyer's anti-matter.
If "strengthening brands" means eight automotive “companies” offering a range of mostly lackluster products that overlap each other in niche, price, engineering and style; products that don’t as a whole adhere to a clear branding strategy, mission accomplished.
So all we’re left with is “reducing structural cost.” As GM’s NA market share is shrinking, and cost-cutting is GM’s Beancounter in Chief’s forte, you’d expect progress on that front. But it should be remembered that all this cost reduction adds to GM’s mountain of debt. The bill for all those employee buyouts and plant closures will eventually come due, and GM’s forthcoming $29.9b VEBA contribution ain’t chicken feed neither.
As for “growing the business globally,” GM North America was, is and will be a financial sinkhole. It will continue to swallow-up all the profits GM can generate abroad– until GM’s Board of Bystanders will be forced to cut North America loose (i.e. declare Chapter 11) to save its European operations.
If you’re happy to admire the Emperor’s new clothes, the “GM Statement on Turnaround Plan” will inspire reverence. But let me draw your attention to one small statement therein. Wagoner promises to “build GM's advanced propulsion leadership position.” For Wagoner to even IMPLY that GM is the leader in advanced propulsion, or SUGGEST that they’re going to build that leadership from scratch, moves beyond hubris into an entirely new realm of fantasy. News flash: the Emperor is naked.
[Read the “GM Statement on Turnaround Plan” here.]
Source: General Motors Death Watch 161: The Emperor’s New Clothes
During Toyota President Katsuaki Watanabe’s speech at the Toyota Media reception at the Detroit Auto Show last Sunday night he mentioned the company hybrid sales goal. I didn’t mention it in my own report of the event because I didn’t consider it all that noteworthy since it’s been discussed before. Evidently some other outlets and even Toyota felt it was important and did mention the subject, mis-quoting Watanabe at the same time. 
When one of our readers sent us this spy video link last week, the first thought that passed our mind was the 2009 Nissan Maxima. However, we decided to cross-check it with some of our inside sources and guess what; this isn’t the 2009 Maxima but the 2010 Infiniti M! The prototype was caught testing in Arizona, and from what our sources told us, Infiniti’s BMW 5-Series adversary will make its debut in late 2009 or early 2010. As with the recently facelifted model (see here), the new “M” will be offered with V6 and V8 engine units while customers will also be able to choose between rear-wheel and all-wheel-drive versions. -Video after the jump
As many as 34,300 2007 & 2008-Model-Year Honda Fit compact vehicles are being recalled to fix the sensor that detects the presence of a child seat or an out-of-position passenger. The recall affects Fit vehicles originally sold in or currently registered in the states of Connecticut, Delaware, Illinois, Indiana, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Jersey, New York, Ohio, Pennsylvania, Rhode Island, Vermont, Virginia, West Virginia, Wisconsin and the District of Columbia.
According to the Federal Highway Administration, drivers over 75 years old have the second-highest fatality rate after teens. CNN’s “When Dad Should Stop Driving” (what about mom?) warns that taking the keys away from an aging parent raises “tricky issues of independence and role reversal.” Marion Somers, author of Elder Care Made Easier (note: not “Easy”), provides a list of 10 question for sibs considering seizing the keys from Mom or Dad. Unfortunately, a lot of them apply to most drivers (e.g. "Does he or she do well driving locally but struggle at higher speeds or when directions are needed?"). She suggests a gradual curtailment for the old folks, rather than a single, indigestible dish of cold turkey (e.g. no children in the car, no highways, no driving above 45 mph). Somers knows of what she speaks. She says convincing her father to surrender the car keys was “one of the most serious and complicated issues that I've had to deal with." In the end, Dad’s “lady friend” was happy to pick him up for their dates. Which is nice, and all, but how old was she?