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Fortune Magazine article on GM

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This is a long article so I'm not going to post all the text here. It was a pretty good read, though.

Gentlemen, start your turnaround

Rick Wagoner's overhaul of GM is producing cooler cars and a glimmer of hope. A rare inside look.

By Alex Taylor III, senior editor

(Fortune Magazine) -- From his office on the 29th floor of General Motors' headquarters complex, chairman and CEO Rick Wagoner has a killer view. He can see for miles, across the Detroit River to Canada and south to the Ohio coastline of Lake Erie. This time of year, the sky is gray, the river is icing up, and the plainspoken Wagoner, 54, is giving an economic forecast that's as chilly as the heartland below. He expects yet another tough year in 2008 for the beleaguered automaker. "We have some fairly severe headwinds: the weaker economy, high commodity and steel prices, and energy prices," he told Fortune in a rare interview. "Frankly, more headwinds, especially from the first two, than I would have hoped. We're going to be in soupy water for a while."

The season always seems to be winter for GM. Yet for the first time in years, signs of warming are emerging. Wagoner is feeling good about the automaker's progress, especially in the troubled heart of its business: making and selling cars in North America. GM's latest new-car launches - Buick Enclave, Cadillac CTS, Chevrolet Malibu - are getting enthusiastic reviews and generating strong sales. Peter De Lorenzo, a much-followed Detroit online columnist and frequent GM critic, writes, "We are now experiencing a GM the likes of which hasn't been seen since the company's glorious heyday from the mid-1950s to the early 1970s." In naming the new Cadillac its 2008 Car of the Year, Motor Trend gushed in ways surprising even for an enthusiast magazine, advising car buffs to "start practicing using the words 'General Motors' and 'celebrated' in the same sentence." The usually circumspect Wagoner is even willing to allow himself a rare pat on the back about GM's latest models: "Here in the U.S., the change in the perception from two or three years ago is astounding."

The new products are giving GM (GM, Fortune 500) a much-needed image boost in the marketplace, while Wagoner has been making huge cuts in costs on the factory floor. By slashing both the hourly and salaried workforces, boosting productivity, and reducing health-care costs, he has cut $9 billion (or 22%) out of GM's fixed operating costs. And following years of patient negotiation, he reached a historic agreement with the United Auto Workers to push responsibility for retiree health care off GM's books, a burden that has been adding about $1,400 to the cost of every car and truck GM builds in North America. Once the health-care trust, called a voluntary employees' beneficiary association, or VEBA, is fully funded (GM's contribution: $29.5 billion), the company will have no more responsibility for it. Analysts expect the new union contract to produce as much as $4 billion in annual savings beginning in 2010.

The rest of the article can be found HERE

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Excellent read. I wonder if historians will look upon the first decade of the 21st Century for the auto industry the same way we do at the early '70s: a 'perfect storm' of congruent forces that rocked the industry. The more things change, the more they stay the same.

Thirty years ago, it was the introduction of federal crash standards, pollution controls (unleaded fuel, catalytic converters) and two 'oil shocks' that rocked Detroit. Now, the tightening of CAFE rules, oil shocks (again), the future of 'fair trade' and the further splintering of the auto market as new technologies emerge that will be the challenges of the next couple decades.

None of this can be easy for GM, Ford or Chrysler. Whether Wagoner is the right man for the job, only time will tell, but the trend is certainly encouraging, IMO. There is still much to be done: reducing the dealer body and firming up the brand identities strike me as the most challenging - assuming the entire Volt thing is in the bag.

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Thirty years ago, it was the introduction of federal crash standards, pollution controls (unleaded fuel, catalytic converters) and two 'oil shocks' that rocked Detroit. Now, the tightening of CAFE rules, oil shocks (again), the future of 'fair trade' and the further splintering of the auto market as new technologies emerge that will be the challenges of the next couple decades.

..oil shocks (this time)... it's actually the destruction of the dollar. oil has stayed pretty much the same relative to the price of gold.

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..oil shocks (this time)... it's actually the destruction of the dollar. oil has stayed pretty much the same relative to the price of gold.

Yeah, it is the dollar not the oil.

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The company flirted with bankruptcy in 1992 and then reacted sluggishly as local rivals Ford (F, Fortune 500) and Chrysler capitalized on the SUV boom.
Umm... WHAT?!?!?!

If *ANY* company capitalized on the SUV boom, it was GENERAL MOTORS.

Back handed compliments from the companion article; "GM's 10 Most Significant Cars"

1959 Chevrolet Corvair

An innovative air-cooled, rear-engine car introduced to compete with Volkswagen's Beetle, the Corvair was attacked by Ralph Nader for its unstable rear suspension. It was discontinued in 1969, the first of several failed efforts at new technology.

1) That "unstable rear suspension" was the same engineering found under the ass of a Porsche. Nader just wanted to make a name for himself and apparently was smacked by a Chevrolet when he was a kid.

"The first of several failed efforts at new technology."

1) I don't think any GM technology can really be summed up as a failure (Excepting the 8-6-4, maybe)

2) GM phased out the Corvair for one reason: The CAMARO got the job done better and cheaper.

1964 Pontiac GTO

By dropping a 389-cubic-inch engine into a plain ordinary Tempest, engineer John Z. DeLorean created the first muscle car, exciting teenagers across the country and spawning a lot of bad popular music.

Ok? So muscle cars are juvenile and music such as The Beach Boys is "bad pop music"

This snobbish bull$h! is one reason why I can't stand the press... Nobody gives a f*ck if you think you're cool because you drive a VW Phaeton and listen to Bach. Just because I drive a Mustang and listen to MetallicA is no reason to think you're any better than me. I'll place money on me being smarter anyway. (I'd put my IQ/college scores up against any of these hacks)

Edited by FUTURE_OF_GM
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Yeah, I was thinking that, too, FOG. The Corvair was a huge flop - it sold, what, well over a million copies. (I'm too lazy to look it up, but it sold more than 100k per year for 9 or 10 years, you do the math!) Sure, the Valiant and Falcon were more 'mainstream' but kudos has to be given to GM in the day when it dared to explore the possibilities.

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my guess is... the turn around is finnished and awaiting products and retired liablity to be taken off the books...

i say 2010 a 9 billion profit, and a 1 or 2% gain in market share in north amerca

GM's got the camaro, G8, traverse, astra, maybe the alpha, ng lacross, ng aura, malibu, cobalt refresh, ng aveo?, maybe volt, possibly impala... GM looks like its got some tricks up its sleaves to weather this perfect storm...

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As long as some radical shift doesn't happen, things should be good.

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Yeah, I was thinking that, too, FOG. The Corvair was a huge flop - it sold, what, well over a million copies. (I'm too lazy to look it up, but it sold more than 100k per year for 9 or 10 years, you do the math!) Sure, the Valiant and Falcon were more 'mainstream' but kudos has to be given to GM in the day when it dared to explore the possibilities.

And therein lies the problem... Because Detroit has been chastised for so long about "failed technology" they are (were) afraid to take any risks. That's one reason why the asians were ALLOWED to be viewed in such a positive and innovative light.

Technically, the ONLY technology the asians can be credited with is hybrid tech IMO. Everything else they've ripped off from Europe and america and improved upon it.

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Umm... WHAT?!?!?!

If *ANY* company capitalized on the SUV boom, it was GENERAL MOTORS.

Back handed compliments from the companion article; "GM's 10 Most Significant Cars"

1) That "unstable rear suspension" was the same engineering found under the ass of a Porsche. Nader just wanted to make a name for himself and apparently was smacked by a Chevrolet when he was a kid.

"The first of several failed efforts at new technology."

1) I don't think any GM technology can really be summed up as a failure (Excepting the 8-6-4, maybe)

2) GM phased out the Corvair for one reason: The CAMARO got the job done better and cheaper.

Ok? So muscle cars are juvenile and music such as The Beach Boys is "bad pop music"

This snobbish bull$h! is one reason why I can't stand the press... Nobody gives a f*ck if you think you're cool because you drive a VW Phaeton and listen to Bach. Just because I drive a Mustang and listen to MetallicA is no reason to think you're any better than me. I'll place money on me being smarter anyway. (I'd put my IQ/college scores up against any of these hacks)

But but....according to all those "hippies" us metal heads are loud,obnoxious and lazy idiots :lol:

I agree with everything you've said here man.

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Umm... WHAT?!?!?!

If *ANY* company capitalized on the SUV boom, it was GENERAL MOTORS.

Back handed compliments from the companion article; "GM's 10 Most Significant Cars"

1) That "unstable rear suspension" was the same engineering found under the ass of a Porsche. Nader just wanted to make a name for himself and apparently was smacked by a Chevrolet when he was a kid.

"The first of several failed efforts at new technology."

1) I don't think any GM technology can really be summed up as a failure (Excepting the 8-6-4, maybe)

2) GM phased out the Corvair for one reason: The CAMARO got the job done better and cheaper.

Ok? So muscle cars are juvenile and music such as The Beach Boys is "bad pop music"

This snobbish bull$h! is one reason why I can't stand the press... Nobody gives a f*ck if you think you're cool because you drive a VW Phaeton and listen to Bach. Just because I drive a Mustang and listen to MetallicA is no reason to think you're any better than me. I'll place money on me being smarter anyway. (I'd put my IQ/college scores up against any of these hacks)

Couldn't it be argued that most of your post is opinion, just colored as a fan of GM?

GM was late to the mid-sized SUV party--first effort was a 2-door Blazer that did not sell near the numbers of the Explorer...that was the heart of the BOF SUV craze...GM was late. GM capitalized on the larger Pick-up market more than SUV's

GM tech failures: Cosworth Vegas (Al engine issues), V8-6-4, Olds Diesel, X-body FWD were underdeveloped & awfully assembled, Airbags developed & abandoned, E-dashboards that couldn't outlast the fist set of tires....

The Corvair, despite the handling being better tamed as the years went by, was simply not what the general public was used to in terms of 'at the limit' behavior---and since you claim the Camaro did it 'better & cheaper'---doesn't that mean that GM created the competition that ultimately killed it?

Why is it snobbish to think that a Company (forget it's GM for a sec) that had Market dominance, was the largest in the World, made $ hand over fist, almost singlehandeedly created a workers middle class AND has been trending towards a slow, painful death for 30 years WILL get criticized by Biz press or anyone else with a pulse and a few brain cells?

Why is every small error in an article an example of bias and every positive review a sign of GM's rebirth & skill? It can't be that extreme.

GM deserves criticism, they've burned their legacy AND now must struggle to get their Mojo back. There's simply no other way.

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Couldn't it be argued that most of your post is opinion, just colored as a fan of GM?

GM was late to the mid-sized SUV party--first effort was a 2-door Blazer that did not sell near the numbers of the Explorer...that was the heart of the BOF SUV craze...GM was late. GM capitalized on the larger Pick-up market more than SUV's

Then doesn't that mean Ford was late to the large SUV market? GM had the Suburban in place and available before the SUV market craze started.

Not everyone can be first. Chrysler was first with the Mini-vans. Ford was first with Jelly-bean styling. GM was first with automatic transmissions and successful FWD. GM was first with 2-mode Hybrid. GM had the first luxury SUV <the Bravada>... Range Rovers of the day were "luxury" in that they were expensive and imported, but not in actual appointments.

Edit:

I disagree with F-O-G's statements about the Corvair, it was never really intended to be a sports car, rather it was supposed to compete in the economy class with the Ford Falcon. It was GM's answer to VW and Ford at the same time.

As far as failed technology.... every car maker has some. GM's is most widely known because it's been the biggest for so long.

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Then doesn't that mean Ford was late to the large SUV market? GM had the Suburban in place and available before the SUV market craze started.

Not everyone can be first. Chrysler was first with the Mini-vans. Ford was first with Jelly-bean styling. GM was first with automatic transmissions and successful FWD. GM was first with 2-mode Hybrid. GM had the first luxury SUV <the Bravada>... Range Rovers of the day were "luxury" in that they were expensive and imported, but not in actual appointments.

Edit:

I disagree with F-O-G's statements about the Corvair, it was never really intended to be a sports car, rather it was supposed to compete in the economy class with the Ford Falcon. It was GM's answer to VW and Ford at the same time.

As far as failed technology.... every car maker has some. GM's is most widely known because it's been the biggest for so long.

perhaps what they ment was chryslers brand Jeep under Lutz's command was the first luxuary suv (Jeep grand Cherokee)... starting the suv Craze that the rest of Detroit enjoyed more then Chrysler

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perhaps what they ment was chryslers brand Jeep under Lutz's command was the first luxuary suv (Jeep grand Cherokee)... starting the suv Craze that the rest of Detroit enjoyed more then Chrysler

Grand Cherokee started in 1993.... Bravada in 1991?

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Actually, Jeep (before Chrysler) had a full-sized SUV back in the early '80s (maybe even the late '70s) that had the fake wood panelling and all the power goodies. I remember seeing them around, back in the day. I am pretty sure they were called Cherokee or Grand Cherokee.

Still, this is splitting hairs. When the S-10 came out in '81, followed by the Blazer/Jimmy, they were pretty revolutionary for their day. Two doors or not, a lot of them were sold up here. Ford beat GM with a 4 door version, but as was pointed out before, the Suburban has been around for many decades.

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Actually, Jeep (before Chrysler) had a full-sized SUV back in the early '80s (maybe even the late '70s) that had the fake wood panelling and all the power goodies. I remember seeing them around, back in the day. I am pretty sure they were called Cherokee or Grand Cherokee.

The Grand Wagoneer... the Wagoneer dated to the early '60s and evolved until it's last year in '91..they still have a cult following today (lots of them being restored).

GM definitely had a lead on Ford with full-size 4dr SUVs, having both the Suburban and Tahoe when Ford still had the 2dr Bronco.

The 4dr compact SUV market was arguably kicked off by the XJ Cherokee in the early-mid '80s, kind of the precursor of the mid-size 4dr SUV boom that the Explorer came to dominate in the '90s.

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The Grand Wagoneer... the Wagoneer dated to the early '60s and evolved until it's last year in '91..they still have a cult following today (lots of them being restored).

GM definitely had a lead on Ford with full-size 4dr SUVs, having both the Suburban and Tahoe when Ford still had the 2dr Bronco.

The 4dr compact SUV market was arguably kicked off by the XJ Cherokee in the early-mid '80s, kind of the precursor of the mid-size 4dr SUV boom that the Explorer came to dominate in the '90s.

Either you have encyclopedic knowledge or you've just dated yourself! :AH-HA_wink:

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Couldn't it be argued that most of your post is opinion, just colored as a fan of GM?

Umm... Yeah... That's the point of a blog such as Cheers and Gears. I've never denied that most of my posts are 100% opinion. In fact, just like my bias for GM, I've touted it and built a name for myself on it.

GM was late to the mid-sized SUV party--first effort was a 2-door Blazer that did not sell near the numbers of the Explorer...
GM was well ahead of their time in LARGE (Read: Very profitable) SUVs. Maybe the author should've been more clear, but I'm sure he talks out of the other side of his mouth when it comes to GM SUVs and the environment. Since, according that faction, GM created and forced the SUV wars onto an innocent unsuspecting public. The Blazer and Jimmy were good first attempts that sold enough to justify the investment and probably made profit for the company. (I have no idea how well they sold --Nor do I care to look it up, because I don't need it to prove my point)

The Corvair, despite the handling being better tamed as the years went by, was simply not what the general public was used to in terms of 'at the limit' behavior---and since you claim the Camaro did it 'better & cheaper'---doesn't that mean that GM created the competition that ultimately killed it?

My point exactly. GM killed the Corvair, Nadar did not.

Why is it snobbish to think that a Company (forget it's GM for a sec) that had Market dominance, was the largest in the World, made $ hand over fist, almost singlehandeedly created a workers middle class AND has been trending towards a slow, painful death for 30 years WILL get criticized by Biz press or anyone else with a pulse and a few brain cells?
It's not.

It's snobbish to think you're better than others based on your brand preference, as my original post inferred. The comment (by the 'journalist') wasn't directed at GM in the first place, it was directed at people like me. 'Ignorant young rednecks' who buy (and/or restore) these 'flamboyant' cars that should be erased from existence for *GASP!* having a bit of personality. THAT'S why I took it so personal. Especially given the fact that while I'm restoring said cars and actually building on a financial investment/asset, this guy is probably driving around in something like a Corolla that is depreciating faster than he can pay it off. Yet he has the nerve to turn his nose at me. (Another curse of being a 'journalist' -- horrible pay)

Why is every small error in an article an example of bias and every positive review a sign of GM's rebirth & skill? It can't be that extreme.

Do you excel at your job? Do people look the other way when academic publications make "small errors" or exhibit bias?

I'm certainly good at my job, and I can bet that *IF* I were a factual source of information, I'd have my proverbial sh*t together. But, simply because it's GM, this natural sense of laziness and regurgitation of poor information seems to be accepted as normal practice.

FWIW, I rarely ever say anything positive about a 'positive' GM review. If that were the case, then you wouldn't be harassing me about being negative and nitpicking bias in a thread about an extremely positive article on GM.

Like I've said from day one; 3 months of puff pieces does not make up for years of ignorance.

GM deserves criticism, they've burned their legacy AND now must struggle to get their Mojo back. There's simply no other way.

Yes, GM does deserve criticism and I criticize GM a lot, but those posts seem to go unnoticed because otherwise no one could whine about posts like this.

Edited by FUTURE_OF_GM
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Either you have encyclopedic knowledge or you've just dated yourself! :AH-HA_wink:

Umm, well, I'm 37...I remember the '80s quite well, and I've read a lot of car magazines over the years (esp. Collectible Automobile which is great for historical articles). And I'm a Jeep owner and fan..

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Umm, well, I'm 37...I remember the '80s quite well, and I've read a lot of car magazines over the years (esp. Collectible Automobile which is great for historical articles). And I'm a Jeep owner and fan..

Damn....I'm 37 too....does that make the two of us the oldest members of C&G...?

LOL

:omfg:

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...I'm 37 and a few months - 108 of them, actually. We could be twins! :smilewide:

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I'm 36.5! Mid 30's must be the sweet spot for car geeks to be on message boards like C&G? :)

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...I'm 37 and a few months - 108 of them, actually. We could be twins! :smilewide:

I'll be 38 in May <groan>

But being older means I was there in person to experience and fall in love with some of those early-to-mid 70's GM cars that I so fondly remember! All the young bucks on here can only dream....

LOL

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