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GM announces big changes to deal with higher gas prices


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WILMINGTON, Del. — General Motors Chairman Rick Wagoner on Tuesday announced sweeping changes designed to deal with a drastically changed gasoline and consumer landscape.

Speaking before the company's annual meeting in Wilmington, Del., he said the change in the U.S. market to smaller vehicles is likely permanent.

"We at GM don't think this is a spike or a temporary shift," Wagoner said.

Among the changes GM will make beginning this year, the company will:

• Put the Chevrolet Volt plug-in electric car into production by 2010.

• Build a new small car in Lordstown, Ohio, in mid-2010 and a new 1.4 liter turbo engine in Flint, Mich. .

• Consider selling its Hummer division.

• Add third shifts at a plant in Orion Township, Mich., that makes the Chevrolet Malibu and the Pontiac G6, and a plant in Lordstown, Ohio, that builds the Chevrolet Cobalt and the Pontiac G5.

• Cease production at a full-size pickup factory in Oshawa, Ontario, stop making SUVs at factories in Moraine, Ohio, and Janesville, Wis., and stop making midsize pickups in Toluca, Mexico.

Wagoner announced the moves in response to slumping sales of pickups and SUVs brought on by high gasoline prices. He says a market shift to smaller vehicles is permanent.

The plant closings will affect about 2,500 workers at each of the four facilities, although Wagoner did not know exact numbers. Many will be able to take openings created when 19,000 more U.S. hourly workers leave later this year through early retirement and buyout offers.

He said the company has no plans to allocate products to the four plants in the future.

The moves will save the company $1 billion per year starting in 2010. Combined with previous efforts, GM will have cut costs by $15 billion a year, Wagoner said.

Link to article is Here

So two things in this article suprise me a little. One is that GM is finally admitting to themselves and the world that the shift to smaller vehicles is likely permanent. The second is that they are considering selling the Hummer brand. I think that would be great if they could dump it.

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I'm not brokenhearted about the Hummer thing, but I liked the H4 concept & looked forward to seeing it happen. Not that they've indicated that it won't, but they're certainly not going to be investing as much in a brand if they're looking to sell...

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I'm not brokenhearted about the Hummer thing, but I liked the H4 concept & looked forward to seeing it happen. Not that they've indicated that it won't, but they're certainly not going to be investing as much in a brand if they're looking to sell...

+1

I was looking forward to the return of the true 2-door SUV.

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:( Sorry but I disagree with the sell of Hummer, Again, small brain short term instant gratification of profits in the thinking of selling HUMMER! When will american companies learn from Demming and Drucker? They finally were forced to learn about quality and still they have not learned the long term lesson about visionary thinking.

Yes you all can flame me if you want, but while I agree the over all shift is to smaller auto's, there is a market and will continue to be a market for the Hummer type products. They have missed out by not adding the diesel into the H2 sooner. A company in Colorado will sell you a new H2 with the Duramax and 6speed allison tranny and it gets mid 20's for milage. I know a lot of people that would buy this. Same with the H3, the 5 cyclinder engine was a joke, the V8 finally gave it a proper engine and if they would move a bit faster and put the new 4.8 diesel in the H3 it can be a home run hit.

Hummer should have been merged into the cadillac dealerships from day one. Just like GMC, Buick and Pontiac should be one dealership and eventually you can merge it into just one name plate and dump 2 of the 3 names.

We all need to admit it that GM has been long in the tooth for change and that there is TOO MANY name plates, but this could best be cleared up by simplifing the brands to just a few and merge the few excellent products into those few name plates to have them be successful.

Realisticly I think we could see just Cheverolet, GMC, Saturn and Cadillac.

My thoughts on this. Cut the middle management fat, wasted marketing dollars and stream line everything to allow a 4 tear product plan.

My thoughts and I am sticking to it. After all, I love all my Vehicles that I own:

2008 H2

2006 Escalade ESV Platinum

2005 CTS

2004 SRX

1994 GMC Suburban SLR

GO GM!!! :jump:

Edited by dfelt
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It cost GM to much to build in Canada now, I'd expect more Canadian jobs to move south, to the USA or Mexico.

now ya. but how about when the USD goes back up? not too mention the lost quality advanatges Oshawa had over other plants and the savings in healthcare dollars canada provides

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I also think that Hummer should stay! It is an image brand that just needs work. Diesels would be a great start.

The other thing GM needs to do is make room for the 4.2L I6 in more vehicles. I know as a fact they would sell lots more 6 cyl trucks if they got rid of that boat anchor of an engine they call the 4.3L V6. The 4.3L is worse on gas that my 5.3L. I have a Trailblazer with the 4.2L, it has lots of power, good towing ability, and great mileage, considering it has 4.10's. If they mated that engine with a 6 speed in an well equipped full size, in stead of a stripped down work truck, they would sell, and increase there MPG. If they sell an LTZ Malibu with a 4cyl, why not an LTZ truck with an I6?

I don't agree on only leaving Chev, Saturn, GMC, and Cadillac.

Buick has a better reputation, and history that Saturn, that's why when the award winning Aura came out, they still didn't sell like they expected. People don't know Saturn. And if Pontiac goes, so do the dreams of ever have a rear drive sedan besides Caddy.

Couldn't GM raise the GVW on their fully-loaded half tons above the limit that require mileage calculated? Call them a "heavy half" and excempt them from the totals.

With all the talk about different engines to save fuel and getting rid of V8's altogether, why couldn't they keep the V8 prestige and sound, but decrease the displacement to something like 4.0L and put a Turbo on it. Still a V8 for the enthusists like myself, but DI T/C AFM with a smaller displacement for fuel savings. Just a thoght.

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now ya. but how about when the USD goes back up? not too mention the lost quality advanatges Oshawa had over other plants and the savings in healthcare dollars canada provides

Wagoner said today at the stockholders meeting that those 4 plants that are closing will not be reopened and no new product will be assigned.

Edited by Pontiac Custom-S
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Looks like a lot of dealers, particularly PBG, will not survive the next 3 years without those high-margin P/U and SUV sales.

Also, I'll be the first one to say here that the Lambdas are the next vehicles to feel the sting of high gas prices and a tough economy. No one expects to see these darlings to drop but just wait...

So, what'll be the big seller at PBG dealers? Let's see...Sierra, Yukon, Envoy all tank...G8 doesn't get a decent start because of fuel economy concerns...Buick sedan sales keep going down...Big winner with increased production? Fleeted-out G6s. Yikes!

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Looks like a lot of dealers, particularly PBG, will not survive the next 3 years without those high-margin P/U and SUV sales.

Also, I'll be the first one to say here that the Lambdas are the next vehicles to feel the sting of high gas prices and a tough economy. No one expects to see these darlings to drop but just wait...

So, what'll be the big seller at PBG dealers? Let's see...Sierra, Yukon, Envoy all tank...G8 doesn't get a decent start because of fuel economy concerns...Buick sedan sales keep going down...Big winner with increased production? Fleeted-out G6s. Yikes!

hence vibes and G3's.

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All necessary moves I feel. The Trailblazer is a relic from a bygone era, and they were right to not put any money into it. It's amazing how fast the GMT-900s fell, but the car-based pickup move will finally move the segment forward. Also, he didn't say they would sell HUMMER for sure, he said they would investigate whether to sell it or change its focus.

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I think it would be wise to sell Hummer and Saab. Then the remaining divisions could be restructured into 3 dealership networks:

* Chevrolet: Mainstream, mass market, volume division. This volume division would compete against other mainstream brands like Ford, Dodge, Toyota, Honda, Hyundai, Kia, and Suzuki and carry the largest, most diverse product portfolio.

* Saturn/Pontiac/GMC: Midmarket, import focused dealer network. Saturn could carry FWD cars and MPVs based on Opel designs. Pontiac could carry RWD cars based on Holden/Opel designs. GMC could carry FWD/AWD crossovers based on actual Opel designs or Opel influenced designs. This dealer network would compete against brands that have images that are sportier, alternative, or Eurocentric such as Mazda, Nissan, Subaru, Volvo, and Volkswagen.

* Buick/Cadillac: Luxury dealer network. Buick would carry FWD luxury cars and FWD/AWD luxury crossovers. Cadillac would carry RWD luxury cars. This dealer network would compete against luxury brands such as Mercedes Benz, BMW, Audi, Lexus, Infiniti, Acura, and Lincoln.

I think that Chevrolet could handle the rapidly shrinking truck/SUV market on its own. Upper trim levels could provide a level of luxury for the truck based products at Chevrolet that would act as a substitute for the absence of these products at GM's other divisions.

I think this plan would allow GM to completely cover the market and provide each division with a relevant image and purpose in the auto market. It would also eliminate the need to create a platform mate for every division since each division (except Chevrolet) would have a focused, streamlined product portfolio. Platform sharing would be utilized to provide products and keep development costs low, but each individual product would receive its own distinct, brand appropriate exterior/interior styling and features to properly differentiate the platform mates. The practice of badge engineering clones to supply a division with products would be completely abolished and anyone suggesting to utilize this ridiculous practice would be immediately dismissed from the corporation.

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the CAW and Ontario government have already started to fight back against Oshawa's closing

http://www.thestar.com/article/435968

- Ontario won’t hesitate to recoup part of a $175-million provincial loan to General Motors earlier than planned in the wake of the automaker’s decision, Premier Dalton McGuinty said today.

It’s early yet, but the loss of 1,000 jobs — the latest blow to Ontario’s ailing manufacturing sector — likely means GM will be in violation of one of the conditions of the loan guarantee, McGuinty said.

Hargrove said GM committed in writing to produce pickups in Oshawa through the life of the new collective agreement which was ratified only two weeks ago.

He said the automaker also promised that Oshawa would build a new generation of light-duty trucks to be introduced in 2011 or 2012.

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the CAW and Ontario government have already started to fight back against Oshawa's closing

http://www.thestar.com/article/435968

Well, the CAW can say what ever they want but the factory WILL close down. GM will have to cover some contract costs, but that will be it. I think it's a joke that Hargrove stated that it is "unfair".Well, it was unfair for me when I could not get hot selling vehicles to sell because the CAW wanted ridiculous benefits. Life isn't fair and the UAW-CAW should not be treated any differently than any other person in the economy. This factory is made to build vehicles that DON'T SELL WELL IN THIS NEW ERA! Why oh why should GM have an obligation to the CAW especially for all the crap that the CAW put GM and their dealers through. As a GM dealer, I for one can't wait to see the gates on that factory to close for good.

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Well, the CAW can say what ever they want but the factory WILL close down. GM will have to cover some contract costs, but that will be it. I think it's a joke that Hargrove stated that it is "unfair".Well, it was unfair for me when I could not get hot selling vehicles to sell because the CAW wanted ridiculous benefits. Life isn't fair and the UAW-CAW should not be treated any differently than any other person in the economy. This factory is made to build vehicles that DON'T SELL WELL IN THIS NEW ERA! Why oh why should GM have an obligation to the CAW especially for all the crap that the CAW put GM and their dealers through. As a GM dealer, I for one can't wait to see the gates on that factory to close for good.

'Zilla; Even though we were warned, this hit us by surprise somewhat. (imo) Maybe now we'll learn. Or be taught the hard way. Yet there are still folks who won't bat an eye until fuel surpasses $8 per gallon. Still be those who are able to afford the luxury and utility of a GMC Denali or the ubiquitous Silverado as they evolve toward increased efficiency. It's natural selection as it applies to machinery. Those who survive the upcoming 'fuel wars' (my weak attempt at humor) will look back and laugh at this some day.

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All necessary moves I feel. The Trailblazer is a relic from a bygone era, and they were right to not put any money into it. It's amazing how fast the GMT-900s fell, but the car-based pickup move will finally move the segment forward. Also, he didn't say they would sell HUMMER for sure, he said they would investigate whether to sell it or change its focus.

Finally some one who noticed. They are killing some old vehicles, plants out of the country that are more expensive with the dollar low. Also He never siad Hummer would be killed or sold. He basically pointed out some options and they will make some changes.

Don't be suprised if some Indian does not buy them that GM puts the focus on the new small Jeep like Hummer they already have in the works. With a V6 or Ecotech it would be a much higer volume vehicle and more economical not just in mileage but purchace price. Jeep is not what they once were and Hummer can take things more back to basics and do not have to deal with heritage Jeep has to deal with.

Anyway none of thid is a shock to any of us and things will work out. At least GM is now waiting to make the changes as they have in the past.

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Hell yes it's permanant. Get used to the idea of $6.00 a gallon gas.

One of the mother's of one of the boys in my sons cub scout troup tried to trade in her late model F-150 on a Fusion. The Ford dealer wouldn't take the F150 at any price.

I have a friend that sells Honda's. A customer came in with a Tahoe, the Honda dealer told them that they'd give him $10,000 towards a Civic. That was when gas was $3.29 When it went to $4.00 per gallon, he wanted to trade the Tahoe. The Honda dealer reduced their offer to $6,000 for the Same vehicle.

Demand for Trucks just isn't coming back.

Chris

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I don't mean to speak for F_O_G, but I believe his post was directed at Wagoner's statement that the shift to smaller cars in the U.S. would be permanent and not shift back to larger vehicles.

However, truth be told, in markets where smaller cars are mainstream, like Europe, larger cars are still offered. Rick better clarify on what he means here, if he wouldn't mind. Some people are reading that as if GM will never build anything larger than a Cobalt again.

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:( Sorry but I disagree with the sell of Hummer, Again, small brain short term instant gratification of profits in the thinking of selling HUMMER! When will american companies learn from Demming and Drucker? They finally were forced to learn about quality and still they have not learned the long term lesson about visionary thinking.

Yes you all can flame me if you want, but while I agree the over all shift is to smaller auto's, there is a market and will continue to be a market for the Hummer type products. They have missed out by not adding the diesel into the H2 sooner. A company in Colorado will sell you a new H2 with the Duramax and 6speed allison tranny and it gets mid 20's for milage. I know a lot of people that would buy this. Same with the H3, the 5 cyclinder engine was a joke, the V8 finally gave it a proper engine and if they would move a bit faster and put the new 4.8 diesel in the H3 it can be a home run hit.

I agree 100%... Hummer still has a lot of life despite the media crusade against it (The media hates it because it was a success, and we all know that nothing from Detroit can be successful without someone attacking it)

But I would rather see Hummer dumped than one of the older divisions.

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I also think that Hummer should stay! It is an image brand that just needs work. Diesels would be a great start.

The other thing GM needs to do is make room for the 4.2L I6 in more vehicles. I know as a fact they would sell lots more 6 cyl trucks if they got rid of that boat anchor of an engine they call the 4.3L V6. The 4.3L is worse on gas that my 5.3L. I have a Trailblazer with the 4.2L, it has lots of power, good towing ability, and great mileage, considering it has 4.10's. If they mated that engine with a 6 speed in an well equipped full size, in stead of a stripped down work truck, they would sell, and increase there MPG. If they sell an LTZ Malibu with a 4cyl, why not an LTZ truck with an I6?

I don't agree on only leaving Chev, Saturn, GMC, and Cadillac.

Buick has a better reputation, and history that Saturn, that's why when the award winning Aura came out, they still didn't sell like they expected. People don't know Saturn. And if Pontiac goes, so do the dreams of ever have a rear drive sedan besides Caddy.

Couldn't GM raise the GVW on their fully-loaded half tons above the limit that require mileage calculated? Call them a "heavy half" and excempt them from the totals.

With all the talk about different engines to save fuel and getting rid of V8's altogether, why couldn't they keep the V8 prestige and sound, but decrease the displacement to something like 4.0L and put a Turbo on it. Still a V8 for the enthusists like myself, but DI T/C AFM with a smaller displacement for fuel savings. Just a thoght.

Because all of that makes too much sense... Just MHO.

Hummer could still be HUGE. It, just like every other GM division, just needs the right product. Whatever happened to the Hydrogen Hummers that Arnold used to drive around in for GM?

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Hell yes it's permanant. Get used to the idea of $6.00 a gallon gas.

I'll ask it again... So even with technology like the Volt, the change is permanent?

Demand for Trucks just isn't coming back.

To me, "smaller vehicles" constitutes Aveos and Fits. And that's why I posed the question.

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I don't mean to speak for F_O_G, but I believe his post was directed at Wagoner's statement that the shift to smaller cars in the U.S. would be permanent and not shift back to larger vehicles.

However, truth be told, in markets where smaller cars are mainstream, like Europe, larger cars are still offered. Rick better clarify on what he means here, if he wouldn't mind. Some people are reading that as if GM will never build anything larger than a Cobalt again.

Exactly...

Thanks :)

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I'll ask it again... So even with technology like the Volt, the change is permanent?

To me, "smaller vehicles" constitutes Aveos and Fits. And that's why I posed the question.

For most people, they won't be able to afford $6 gas AND tempermental technology like hybrids. Their only choice will be to downsize. This is why vehicles like the '09 Aveo and the new 'secret' car coming out next year will be so very important for GM.

I wonder how GM will weather the transition from it high priced/high profit trucks to lower priced/lower profit small cars. It looks like GM is going to be positioned well in the small car market, but how are they going to replace the profits of the trucks?

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Hummer has no future in an America with $4/5/6 gas, it just isn't practical, even if they went the diesel route, who knows where diesel is going to wind up $8/gallon? With the economy what it is, people wont be able to afford to buy and drive Hummers. Nothing to do with the media hating it :rolleyes: its a simple matter of economics. Supply and demand. The demand is going to dry up fast, might as well cut the supply.

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Hummer has no future in an America with $4/5/6 gas, it just isn't practical, even if they went the diesel route, who knows where diesel is going to wind up $8/gallon? With the economy what it is, people wont be able to afford to buy and drive Hummers. Nothing to do with the media hating it :rolleyes: its a simple matter of economics. Supply and demand. The demand is going to dry up fast, might as well cut the supply.

H4.

Like I said, Hummer needs product.

I'm willing to bet that Land Rovers keep selling.

Edited by FUTURE_OF_GM
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The Patriot and Compass seem to be selling well, better than most other Chryslers, but Jeep doesn't have the stigma that Hummer has, not just with the media, but with average people. Hummer has an image issue similar to the image issue Olds had in the years before it was axed. Olds was seen (by many) to be cars for old people. Hummer is seen (by many) as a brand of gas guzzlers. The only way the H4 helps is if it gets exceptional mileage and GM advertises the hell out of that fact.

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I don't think that GM should give up building larger vehicles, they just need to build fewer of them. The Chevy dealer in Logan, Ohio sells lots of Chevy trucks to people from Columbus. Why? Because they are in farm country and Farmers, contractors, people with large animals,etc, need trucks.

We just need to get in the buisiness of building great small cars.

Chris

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Is this new secret car Delta II-based? If so... how could it not overlap like crazy with the Cobalt/G5/Asstra? Will it be a small, upscale car? I'm thinking it has to be the same size, but higher-priced than the current domestic Deltas, with the current cars slowly disappearing from the market... GM's way of shoving a high-priced small car into the market. Well, if that is the case, it better be worth it. I would consider a Pontiac version of this car, if it has enough Pontiac DNA to satisfy me... sheetmetal, interior and wheels, suspension tuning, aftermarket support...

I am not sad atall to hear of Hummer's possible demise. Peripherals on the block, that's what I like to hear, and it makes much more sense... no more of this talk of core brands dying.

Edited by ocnblu
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I don't think that GM should give up building larger vehicles, they just need to build fewer of them.

I don't think GM will give up building larger vehicles. They know that there is a market for vehicles larger than a car or truck in the compact-size class and they will not abandon those customers. They will have something for them.

We just need to get in the buisiness of building great small cars.

Agreed.

But let me say this, if I am misunderstanding anything: if GM does intend to virtually abandon mid-sized vehicles at the least, they will make a horrible mistake.

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I don't think that GM should give up building larger vehicles, they just need to build fewer of them. The Chevy dealer in Logan, Ohio sells lots of Chevy trucks to people from Columbus. Why? Because they are in farm country and Farmers, contractors, people with large animals,etc, need trucks.

We just need to get in the buisiness of building great small cars.

Chris

Farmers, small business owners, etc will likely stick with their old trucks until they die, more so than they have been, given the craptastic economy. A well-kept Silverado will run a million miles, might as well keep it that long instead of trading it in at 400k.

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I don't think that GM should give up building larger vehicles, they just need to build fewer of them. The Chevy dealer in Logan, Ohio sells lots of Chevy trucks to people from Columbus. Why? Because they are in farm country and Farmers, contractors, people with large animals,etc, need trucks.

We just need to get in the buisiness of building great small cars.

Chris

Farmers, small business owners, etc will likely stick with their old trucks until they die, more so than they have been, given the craptastic economy. A well-kept Silverado will run a million miles, might as well keep it that long instead of trading it in at 400k.

I agree with both of you. However, GM's problem is not on innovation to success, GM's problem is retention of success and neglection of existing. Many a times GM has lost its turf, a market it created or excelled because it moved on. GM will build spectacular small cars, but it will be assinine to neglect the big trucks which will now be their bastard children. GM has lost grounds many a times, small truck market, losing Camaro for a generation, what they are now doing with GMT 360's.

Small truck turf has all but being taken by Tacoma. A neglected era of midsizers led to dominance of Japanese in that market. Look at Toyota, they still have their core Camry while they "innovate" with the Turdra, Sequoia, etc, granted their innovation sucks. GMT 900's have considerable investment. Neglect or stopping to develop this market will cause loss in domination. Construction industry, small retail sectors which lease the trucks will be worse hit than those 400k mile driving farmers. That is a huge market. Big SUVs will decline, but truck market will not see a steep plunge. Yes it will go down, but it will stabilize at some point, whence it will be only for people who NEED them, not WANT them. Despite of these high gas prices, Dodge is still bullish about the truck market, because their market research shows - most core customers, people who buy trucks; buy them for utility not pleasure. Thinking just because gas will go to $7.00 or $70.00 will not hamper this market. I agree considerable dough should not be allocated to the big trucks, but PLEASE do not neglect them.

Just like the hybrid Silverado, keep them moving and chugging along.

GM should build new, GM should move forward, but keep those trusted people with you GM. Stop ignoring the customers you already have.

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I have a feeling the new GM will be midsize and small FWD cars. At least that's the feeling Rick Wagoner gave me this morning at the stockholders meeting. I also have a feeling you are going to see more commercials on the 17 models that get 30 mpg or more. He spoke on that too this morning.

Well that's just bloody wonderful. :rolleyes:

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