A portrait of My Industry

[IbuyGM]

A Portrait of My Industry The Wall Street Journal By Rick Wagoner (Commentary) Dec. 6, 2005 DETROIT – Since mid-October, General Motors has announced plans to cease production at 12 North American manufacturing facilities and eliminate 30,000 jobs by 2008; trim $1 billion in net material costs in 2006; and, in cooperation with the United Automobile Workers, reduce GM's retiree health-care liabilities by $15 billion, or about 25 percent, for an annualized expense reduction of $3 billion. The reason for these dramatic actions is no secret: GM has lost a lot of money in 2005, due to rapidly increasing health-care and raw-material costs, lower sales volumes and a weaker sales mix -- essentially, we've sold fewer high-profit SUVs and more lower-profit cars. What is less clear is why things turned sour so fast for GM, as well as for other American automakers and suppliers. To put it another way, why are so many foreign automakers and suppliers doing well in the United States, while so many U.S.-based auto companies are not? Despite public perception, the answer is not that foreign automakers are more productive or offer better-quality or more fuel-efficient vehicles. In this year's Harbour Report, which measures manufacturing productivity, GM plants took three of the top five spots in North America, including first place. In the latest J.D. Power Initial Quality Study, GM's Buick and Cadillac ranked among the top five vehicle brands sold in America, ahead of nameplates like Toyota, Honda, Acura, Nissan, Infiniti and Mercedes-Benz. And GM offers more models that get over 30 miles per gallon (highway) than any other automaker. In fact, this kind of operating performance makes GM's recent financial performance all the more frustrating. The fact is, we're building the best cars and trucks we've ever built at GM, our products are receiving excellent reviews, and we're running the business in a globally competitive manner. Outside of North America, we're setting sales records. In fact, for the first time in our history, we will sell more cars and trucks this year outside the United States than inside, aided in no small part by our market-leading performance in China. So why, fundamentally, are GM and the U.S. auto industry struggling right now? Intense competition, for one. The global auto business grows tougher every year, and we accept that. Our ability to compete has made us the world's No. 1 automaker for 74 consecutive years, and we're fighting hard to stay on top. Beyond that, our performance in the marketplace has not been what we've wanted it to be. While we've been strong in truck sales, we've been weaker in cars, and, yes, the recent surge in gas prices hurt sales. While we've led in technologies like OnStar, we've lagged in others like hybrid vehicles. Rest assured, we're working hard to address the areas where we lag. Simply put, we are committed to doing a better job of designing, building and selling high-quality, high-value cars and trucks that consumers can't wait to buy. No excuses. We will step up our performance in this regard. But competition and marketplace performance are not the whole story. To fully understand why GM and the U.S. auto industry are struggling right now, we have to understand some of the fundamental challenges facing American manufacturing in general -- challenges well beyond the control of any single company. There are those who ask if manufacturing is still relevant for America. My view: You bet it is! Manufacturing generates two-thirds of America's R&D investment, accounts for three-fourths of our exports, and creates about 15 million American jobs. And the auto industry is a big part of that, accounting for 11 percent of American manufacturing, and nearly 4 percent of U.S. GDP. Together, GM, Ford and DaimlerChrysler invest more than $16 billion in research and development every year -- more than any other U.S. industry. And GM, alone, supports more than one million American jobs. So what are the fundamental challenges facing American manufacturing? One is the spiraling cost of health care in the United States. Last year, GM spent $5.2 billion on health care for its U.S. employees, retirees and dependents – a staggering $1,525 for every car and truck we produced. And the figure is going up again this year. Foreign automakers have just a fraction of these costs, because they have few, if any, U.S. retirees, and in their home countries their governments fund a much greater portion of employee and retiree health-care costs. Some argue that we have no one but ourselves to blame for our disproportionately high health-care "legacy costs." That kind of observation reminds me of the saying that no good deed going unpunished. That argument, while appealing to some, ignores the fact that American automakers and other traditional manufacturing companies created a social contract with government and labor that raised America's standard of living and provided much of the economic growth of the 20th century. American manufacturers were once held up as good corporate citizens for providing these benefits. Today, we are maligned for our poor judgment in "giving away" such benefits 40 years ago. Another factor beyond our control is lawsuit abuse. Litigation now costs the U.S. economy more than $245 billion a year, or more than $845 per person. That's more than 2 percent of our GDP. No other country has costs anywhere near this level. And the perverse thing is that, in many cases, the majority of courtroom settlements go to the lawyers and other litigation costs, not to the injured parties. Another major concern is unfair trading practices, especially Japan's long-term initiatives to artificially weaken the yen. A leading Japanese automaker reports that for each movement of one yen against the dollar, it gains 20 billion yen in additional profitability -- or nearly $170 million at today's exchange rate. No wonder Japanese automakers have noted their recent record profits were aided by exchange rates. And no wonder the U.S. trade-balance deficit continues to grow by leaps and bounds. There are other issues, of course, but my point is this: We at GM have a number of tough challenges that we must and will address on our own -- but we also carry some huge costs that our foreign competitors do not share. Some say we're looking for a bailout. Baloney -- we at GM do not want a bailout. What we want -- after we take the actions we are taking, in product, technology, cost and every area we're working in our business today -- is the chance to compete on a level playing field. It's critical that government leaders, supported by business, unions and all our citizens, forge policy solutions to the issues undercutting American manufacturing competitiveness. We can do this. And we need to do it now. Really suprised I have not seen this at a topic yet. Wagoner wrote this and gave it to the WSJ. I have opinions about this, but wondering what you all think of this.

[Newbiewar]

i read the title some where a few days ago i think... but i dont think i opened it... anyhow... its good to hear wagooner doesnt want to abandon the retires... or american workers... although he is a little bit... because he's turning GM into a global company rather then an american company...

[regfootball]

looks like THE RICK is swinging the ax in a big PR warfare special! Its GM vs Toyota ladies and gentlemen!!!!!!!! even if i don't agree with every iota of his claims, it was a well written piece. Edited December 7, 2005 by regfootball

[Newbiewar]

looks like THE RICK is swinging the ax in a big PR warfare special!  Its GM vs Toyota ladies and gentlemen!!!!!!!!

even if i don't agree with every iota of his claims, it was a well written piece.

[post="54337"]<{POST_SNAPBACK}>[/post]

yea very well written... lol i like the fact he pretty much says, the reason the us automakers are failing is because the japanese ecconomy sucks...

[FUTURE_OF_GM]

[quote]Despite public perception, the answer is not that foreign automakers are more productive or offer better-quality or more fuel-efficient vehicles. In this year's Harbour Report, which measures manufacturing productivity, GM plants took three of the top five spots in North America, including first place. In the latest J.D. Power Initial Quality Study, GM's Buick and Cadillac ranked among the top five vehicle brands sold in America, ahead of nameplates like Toyota, Honda, Acura, Nissan, Infiniti and Mercedes-Benz. And GM offers more models that get over 30 miles per gallon (highway) than any other automaker.[/quote]

EXCELLENT COMMENTS!!!

But Rick, the consumer will not know this unless you tell them.... GM still continues to do a HORRIBLE job of getting the message out on just about EVERY positive aspect of the company and it's products.

[quote]So why, fundamentally, are GM and the U.S. auto industry struggling right now?[/quote]

We all know the answer to that.... IMAGE, IMAGE, IMAGE!!!!!

And until GM presents a better image and until those who control pop culture and popular opinion (The media) start giving GM it's dues then your sales will continue to falter, REGARDLESS of how great the product is... If the consumer is automatically steered away from the product and never experiences it first hand then all the good product in the world 'couldn't help GM put it's sales back together again.'

[quote]Our ability to compete has made us the world's No. 1 automaker for 74 consecutive years, and we're fighting hard to stay on top.[/quote]

You'd better be prepared to fight hard!


[quote]There are those who ask if manufacturing is still relevant for America. My view: You bet it is! Manufacturing generates two-thirds of America's R&D investment, accounts for three-fourths of our exports, and creates about 15 million American jobs. And the auto industry is a big part of that, accounting for 11 percent of American manufacturing, and nearly 4 percent of U.S. GDP. Together, GM, Ford and DaimlerChrysler invest more than $16 billion in research and development every year -- more than any other U.S. industry. And GM, alone, supports more than one million American jobs.[/quote]

Or in other words: F*ck Toyota and their "380,000 jobs"---which is a falsified figure to begin with.

I think this is a very good statement that should be yelled from the roof tops of the big three to average consumers. These companies STILL contribute FAR more to the economy than the transplants, you know the "new domestics" that all these analysts and liberal media/professor types like to trumpet as our savior and futures. I'm sure somone here (I won't name any names though) will come on record and contradict this statement though and downplay what Wagoner said in order to reassure the sheep... And what's sad is these people ARE the opinion leaders that guide the masses. The only way people will know of THIS fact is if GM and Ford and Chrysler DIRECTLY get the message out.

WSJ is a good start BUT not enough!

[quote]Some argue that we have no one but ourselves to blame for our disproportionately high health-care "legacy costs." That kind of observation reminds me of the saying that no good deed going unpunished.[/quote]

It's also called the "Just world phenomenon" in psychology and is the idea that "Everyone gets what they deserve" and often results in people blaming the victim for their own demise....

Example: Eddie got killed in a car wreck. A bystander would then say "Eddie shouldn't have been going so fast, then maybe he wouldn't have gotten killed" when in reality a flat tire, certainly not Eddie's fault (Just as healthcare and the goodwill of providing it isn't a FAULT of GM) caused Eddie to lose control.

[quote]American manufacturers were once held up as good corporate citizens for providing these benefits. Today, we are maligned for our poor judgment in "giving away" such benefits 40 years ago.[/quote]

And Merry Christmas my friends...

IMO, manufacturing IN GENERAL has a very bad name now in this country thanks to "the street" and the "educated" lot thinking that blue collar workers are less significant human beings.

Imagine that; GM being a good citizen and then being punished for it.... Kinda like GM making the cars people WANT and then being punished for it by slanderous media.... Or kinda like GM investing in a LONG TERM energy solution and then being lambasted for it by a short sighted public, bias media and vote hungry, popular opinion swayed government...Typical America and TYPICAL reactions to one of our own businesses, ESPECIALLY when it comes to the much maligned "inferior" auto industry and rust belt.

[quote]Another factor beyond our control is lawsuit abuse. Litigation now costs the U.S. economy more than $245 billion a year, or more than $845 per person. That's more than 2 percent of our GDP. No other country has costs anywhere near this level. And the perverse thing is that, in many cases, the majority of courtroom settlements go to the lawyers and other litigation costs, not to the injured parties.[/quote]

I'm glad to see SOMEONE finally raising this issue....

I witnessed this first hand when the greedy lawyers destroyed our tobacco industry in NC....

Did it close the tobacco makers? Absolutely not. Did it reduce young smokers? Not by the looks of things, almost EVERYONE around here that is my age and that I know smokes. Did it make the families of lost loved ones feel better? Probably not, money can't buy happiness and they didn't get much money, if any. Did it make a few back stabbing lawyers rich and cost the common man more for goods... ABSOLUTELY!


[quote]Another major concern is unfair trading practices, especially Japan's long-term initiatives to artificially weaken the yen. A leading Japanese automaker reports that for each movement of one yen against the dollar, it gains 20 billion yen in additional profitability -- or nearly $170 million at today's exchange rate. No wonder Japanese automakers have noted their recent record profits were aided by exchange rates. And no wonder the U.S. trade-balance deficit continues to grow by leaps and bounds.[/quote]

Washington should've fixed this long ago... And I *CERTAINLY* hope it comes back to bite this naive country right square in the ass.

[quote]Some say we're looking for a bailout. Baloney -- we at GM do not want a bailout. What we want -- after we take the actions we are taking, in product, technology, cost and every area we're working in our business today -- is the chance to compete on a level playing field.[/quote]

GOSPEL!!!!!

Yet some are still too oblivious to see this argument. a.k.a. THE GOVERNMENT. Good luck Rick, I hope you have lots of money to sway the politicians for change, because that's the only way Washington works these days... Money talks and the politicians serve those who talk the loudest.

[FUTURE_OF_GM]

i read the title some where a few days ago i think... but i dont think i opened it...

anyhow... its good to hear wagooner doesnt want to abandon the retires... or american workers... although he is a little bit... because he's turning GM into a global company rather then an american company...

[post="54307"]<{POST_SNAPBACK}>[/post]

TO SURVIVE!

[evok]

GM and GM's directors know what there problems are. Contraints of the past are very difficult to overcome. You just can't ripe up contracts, design better products, reorganize the corporate structure, implement and execute new systems over night. "Some argue that we have no one but ourselves to blame for our disproportionately high health-care "legacy costs." That kind of observation reminds me of the saying that no good deed going unpunished. That argument, while appealing to some, ignores the fact that American automakers and other traditional manufacturing companies created a social contract with government and labor that raised America's standard of living and provided much of the economic growth of the 20th century. American manufacturers were once held up as good corporate citizens for providing these benefits. Today, we are maligned for our poor judgment in "giving away" such benefits 40 years ago." GM became a welfare organization with its only reason for existance to support their retirees. Every which way their hands have been tied and contrained. They could not think outside the box, when they can not get out of it. Edited December 7, 2005 by evok

[Matt276]

That's the reason Wagoner has to go. He must be blind far saying that our products are as good as the competition. Did he compare the interior materials with a ToyoHonda. The reason why people do not buy GM's cars is because they are NOT GREAT, just good enough. ( cheap interiors, 4-speed trannies....) He is just a business man, not a car lover. Now, bring Mark Laneve in.

[The O.C.]

I'll admit it was a great piece and every single one of Wagoner's points was true and well-made. However, what really disturbs me, is his lack of understanding (by HIS admittance) as to why the public doesn't gravitate towards GM's increasingly higher-quality products. Rick, more than ANYONE should have total and full understanding of that issue. Yes, it's perception. BUT....Rick.....WHY do so many consumers have the perception that GM just is not competitive in the design and execution of its products? How much time HAS Rick Wagoner spent actually living with and driving the competition? Has he ever driven a BMW 3-series with a manual transmission on a winding mountain road? NO....he gets driven in a Cadillac DTS to and from work every day......not to mention there are no "winding mountain roads" in southeastern Michigan. Does Rick know WHY people seem to like the blandly-styled, but smartly-executed Toyota and Lexus products seemingly flooding the marketplace? Has he ever gone on a business trip and rented a Toyota Camry LE 4cyl from Hertz to see why his Malibu is so far off the mark it's not even funny...? Probably not...I bet he gets shuttled to-and-fro on business trips... Has Rick ever spent a considerable amount of time in a market like L.A. to see how automobiles impact a Californian's lifestyle? Or why people that live here place such a high importance on brand and image, even contrary to actual quality and reliability? Or why there are more BMWs and Mercedes-Benzs sold here than anywhere else in the country......and there are LESS GM products sold here than anywhere else in the country? I bet he hasn't....... Has he EVER spent time in Marysville, OH, or Smyrna, TN, or Spartanburg, SC., to find out why the blue-collar residents in those communities are SO happy working for their companies (Honda, Nissan, BMW) and why they feel good about the contributions their companies are making to their local economies? And ALSO, why those blue-collar workings RESIST being organized by the UAW? I simply refuse to believe that Rick is so beyond this understanding. We may not like what's happening to GM, but if normal mortals like us can see it.....can understand it.....can pinpoint it......why can't he? Others in the industry understand it far better.....unfortunately most of those others work for import auto manufacturers and they are taking EVERY advantage to capitalize on it.....at Rick's expense.

[CARBIZ]

I am glad to see that Rick appears to be getting a handle on things. I doubt Washington will wake up, unless GM goes chapter 11 and Washington gets saddled with the pension costs. Then maybe they will wake up. To a certain extent I agree with OC about GM playing catch up in the design department. Over all, I believe most of GM's products are at least as good as what the competition has to offer. Perhaps part of the problem, however, is that GM needs more "home runs" to wake up the jaded media. The Impala, the HHR, the new Cobalt, the G6 - these are all very nice cars. Are they industry leaders? Probably not. They are all solid. They all have decent fit and finish, quality of materials, ride and handling, but with the possible exception of the Impala, none of them are hits out of the park. GM probably understands that 90% of the automotive buying public doesn't want or need to drive through winding mountain roads in a 24 spd transmission; however, the mouthy car critics seem to be chafing for this, so it would seem the smart thing to do is to provide such things whether warranted or not. MOST people haven't a clue what a 5 spd automatic does over a 4 spd, but if they are TOLD it is better then they will BELIEVE it is better and it becomes a must have item. It used to be that BMW and Mercedes were niche vehicles, but now it would seem that the media is trying to drag Cadillac into the performance forum, too. I will admit that Cadillac built some crap in the late '80s, but I don't understand why it has become uncool to build vehicles for the geriatric set, especially when they have the money! GM used to occupy the vast middle ground, but now the likes of Hyundai and Kia are nipping at GM's heels at the low end while Lexus and BMW are doing it at the high end. If people objectively look at what GM actually did in the 1960s, it built a lot of bland vehicles with a few stands outs, but the media was far more forgiving. If you look at MT articles from the period, battle cruisers like the Chrysler 300 and Grand Prix were gushed over - vehicles that would only get heaps of scorn and ridicule today. Perhaps the media was too forgiving 25 years ago, but today they won't give GM a break on anything. GENERAL Motors is going to have to reinvent itself if it is to displace Toyota from the vast middle ground.

[CaddyXLR-V]

I'll admit it was a great piece and every single one of Wagoner's points was true and well-made.

However, what really disturbs me, is his lack of understanding (by HIS admittance) as to why the public doesn't gravitate towards GM's increasingly higher-quality products.

Rick, more than ANYONE should have total and full understanding of that issue.

Yes, it's perception.  BUT....Rick.....WHY do so many consumers have the perception that GM just is not competitive in the design and execution of its products?

How much time HAS Rick Wagoner spent actually living with and driving the competition?  Has he ever driven a BMW 3-series with a manual transmission on a winding mountain road?  NO....he gets driven in a Cadillac DTS to and from work every day......not to mention there are no "winding mountain roads" in southeastern Michigan.

Does Rick know WHY people seem to like the blandly-styled, but smartly-executed Toyota and Lexus products seemingly flooding the marketplace?  Has he ever gone on a business trip and rented a Toyota Camry LE 4cyl from Hertz to see why his Malibu is so far off the mark it's not even funny...?  Probably not...I bet he gets shuttled to-and-fro on business trips...

Has Rick ever spent a considerable amount of time in a market like L.A. to see how automobiles impact a Californian's lifestyle?  Or why people that live here place such a high importance on brand and image, even contrary to actual quality and reliability?  Or why there are more BMWs and Mercedes-Benzs sold here than anywhere else in the country......and there are LESS GM products sold here than anywhere else in the country?  I bet he hasn't.......

Has he EVER spent time in Marysville, OH, or Smyrna, TN, or Spartanburg, SC., to find out why the blue-collar residents in those communities are SO happy working for their companies (Honda, Nissan, BMW) and why they feel good about the contributions their companies are making to their local economies?  And ALSO, why those blue-collar workings RESIST being organized by the UAW? 

I simply refuse to believe that Rick is so beyond this understanding.  We may not like what's happening to GM, but if normal mortals like us can see it.....can understand it.....can pinpoint it......why can't he?  Others in the industry understand it far better.....unfortunately most of those others work for import auto manufacturers and they are taking EVERY advantage to capitalize on it.....at Rick's expense.

[post="54570"]<{POST_SNAPBACK}>[/post]

I think he knows. But do you expect him to state that his companies products are not as good as the competitions? Can you expect any companies CEO to openly state their products are inferior? That will not help the company at all.
I'm sure if GM were allowed a level playing field, we would be able to tell the difference in the products from before and after.

[Flybrian]

Or why people that live here place such a high importance on brand and image, even contrary to actual quality and reliability?

[post="54570"]<{POST_SNAPBACK}>[/post]

Sorry, but that's just sad and hollow.

[FUTURE_OF_GM]

I'll admit it was a great piece and every single one of Wagoner's points was true and well-made.

However, what really disturbs me, is his lack of understanding (by HIS admittance) as to why the public doesn't gravitate towards GM's increasingly higher-quality products.

Rick, more than ANYONE should have total and full understanding of that issue.

Yes, it's perception.  BUT....Rick.....WHY do so many consumers have the perception that GM just is not competitive in the design and execution of its products?

How much time HAS Rick Wagoner spent actually living with and driving the competition?  Has he ever driven a BMW 3-series with a manual transmission on a winding mountain road?  NO....he gets driven in a Cadillac DTS to and from work every day......not to mention there are no "winding mountain roads" in southeastern Michigan.

Does Rick know WHY people seem to like the blandly-styled, but smartly-executed Toyota and Lexus products seemingly flooding the marketplace?  Has he ever gone on a business trip and rented a Toyota Camry LE 4cyl from Hertz to see why his Malibu is so far off the mark it's not even funny...?  Probably not...I bet he gets shuttled to-and-fro on business trips...

Has Rick ever spent a considerable amount of time in a market like L.A. to see how automobiles impact a Californian's lifestyle?  Or why people that live here place such a high importance on brand and image, even contrary to actual quality and reliability?  Or why there are more BMWs and Mercedes-Benzs sold here than anywhere else in the country......and there are LESS GM products sold here than anywhere else in the country?  I bet he hasn't.......

Has he EVER spent time in Marysville, OH, or Smyrna, TN, or Spartanburg, SC., to find out why the blue-collar residents in those communities are SO happy working for their companies (Honda, Nissan, BMW) and why they feel good about the contributions their companies are making to their local economies?  And ALSO, why those blue-collar workings RESIST being organized by the UAW? 

I simply refuse to believe that Rick is so beyond this understanding.  We may not like what's happening to GM, but if normal mortals like us can see it.....can understand it.....can pinpoint it......why can't he?  Others in the industry understand it far better.....unfortunately most of those others work for import auto manufacturers and they are taking EVERY advantage to capitalize on it.....at Rick's expense.

[post="54570"]<{POST_SNAPBACK}>[/post]

EXCELLENT POST!!!

Many of GM's problems as well as their products problems are FUNDAMENTAL in nature and blatantly obvious. And that's what makes it so painful to see GM fall like it is.

They HAVE the technology, they HAVE the designers, they HAVE the resources... They have EVERYTHING needed to design excellent products, yet the fundamental error is that they have no idea how to put 1+1 together to equal 2... And that's a very painful and annoying realization for GM enthusiasts and probably contributes a lot to the resentment of Americans and the media.

For example... If I'm planning a DYNAMIC volume product for Pontiac and I know these factors. 1) It needs to appeal to a majority of the population and on top of that it needs to appeal to consumers who are steadily turning their backs on Pontiac. 2) It needs to not only "compete" with the competition in one of the hottests segments of the market but has to be BETTER than that competiton This segment has been dominated by Asian manufacturers and their golden reputation for years now. 3) Pontiac needs a renaissance and is in the middle of trying to bill itself as the performance division of the world's largest automaker and has a HUGE reputation for that which it must live up to. 4) The car absolutely needs to be something that cannot be found in a Chevrolet or Saturn dealership or it will be a lost cause.

So the stakes are high for image, performance and recognition. One would think that GM management could see this and would act accordingly since it has all the resources at hand.

But no, GM then puts out the G6 with subjective dated styling a "rental car" OHV detuned V6 and a chassis that can't even run with the segment leaders. On top of that they're going to spend the money to 1) Put exact spec performance versions at BOTH Chevrolet and Pontiac dealership, which is going to suffocate the G6. And then 2) Make a Saturn version that is essentially everything the G6 should've been.

Why GM? Why make the fundamental mistakes that are so painfully obvious?

Sorry, but that's just sad and hollow.

Welcome to consumption junction... Welcome to america

It's not who you are, it's who you buy.

[The O.C.]

Sorry, but that's just sad and hollow.

[post="54691"]<{POST_SNAPBACK}>[/post]

REGARDLESS of whether you think it's "sad and hollow" or not.....it's a fact of life and GM needs to figure out WHY it's a fact-of-life......and it's not just a factor in CA either....

That's my point.

AND YES.....GM now has some great cars......HHR, Corvette, CTS, Lucerne, G6.....but if the public still won't acknowledge those great products, you need to do a down-and-dirty look at WHY....WHY....WHY.

[The O.C.]

EXCELLENT POST!!!

Many of GM's problems as well as their products problems are FUNDAMENTAL in nature and blatantly obvious. And that's what makes it so painful to see GM fall like it is.

They HAVE the technology, they HAVE the designers, they HAVE the resources... They have EVERYTHING needed to design excellent products, yet the fundamental error is that they have no idea how to put 1+1 together to equal 2... And that's a very painful and annoying realization for GM enthusiasts and probably contributes a lot to the resentment of Americans and the media.

For example... If I'm planning a DYNAMIC volume product for Pontiac and I know these factors. 1) It needs to appeal to a majority of the population and on top of that it needs to appeal to consumers who are steadily turning their backs on Pontiac. 2) It needs to not only "compete" with the competition in one of the hottests segments of the market but has to be BETTER than that competiton This segment has been dominated by Asian manufacturers and their golden reputation for years now. 3) Pontiac needs a renaissance and is in the middle of trying to bill itself as the performance division of the world's largest automaker and has a HUGE reputation for that which it must live up to. 4) The car absolutely needs to be something that cannot be found in a Chevrolet or Saturn dealership or it will be a lost cause.

So the stakes are high for image, performance and recognition. One would think that GM management could see this and would act accordingly since it has all the resources at hand.

But no, GM then puts out the G6 with subjective dated styling a "rental car" OHV detuned V6 and a chassis that can't even run with the segment leaders. On top of that they're going to spend the money to 1) Put exact spec performance versions at BOTH Chevrolet and Pontiac dealership, which is going to suffocate the G6. And then 2) Make a Saturn version that is essentially everything the G6 should've been.

Why GM? Why make the fundamental mistakes that are so painfully obvious?
Welcome to consumption junction... Welcome to america

It's not who you are, it's who you buy.

[post="55141"]<{POST_SNAPBACK}>[/post]

Thanks Future.....

You know, GM needs to figure out WHY (in my case here in CA) the Corvette is no longer snickered at by the Porsche, Ferrari, and AMG-driving populace here in California....WHY it's actually now RESPECTED.....

Also, GM needs to figure out WHY (in one case with a friend of mine) a consumer would trade in an Audi A6 2.7T Quattro on a new CTS...?

.....and WHY do many "hollywood" industry types and other execs choose to tool around in a new Escalade with 22-inch "blings" when they could easily afford a Range Rover....?

They've turned the corner in certain ways.....but now what Rick needs to do if figure out the answer to those WHYs above.....and transfer that philosophy to the numerous competent-yet-mainstream Cobalts, Malibus G6s, LaCrosses, and Saturns roaming the lands.

[CaddyXLR-V]

Thanks Future.....

You know, GM needs to figure out WHY (in my case here in CA) the Corvette is no longer snickered at by the Porsche, Ferrari, and AMG-driving populace here in California....WHY it's actually now RESPECTED.....

Also, GM needs to figure out WHY (in one case with a friend of mine) a consumer would trade in an Audi A6 2.7T Quattro on a new CTS...? 

.....and WHY do many "hollywood" industry types and other execs choose to tool around in a new Escalade with 22-inch "blings" when they could easily afford a Range Rover....?

They've turned the corner in certain ways.....but now what Rick needs to do if figure out the answer to those WHYs above.....and transfer that philosophy to the numerous competent-yet-mainstream Cobalts, Malibus G6s, LaCrosses, and Saturns roaming the lands.

[post="55175"]<{POST_SNAPBACK}>[/post]

So true. GM needs to find out why people buy Accords and Camrys. I bet the reason is not price. GM needs to make cars that people want to buy because of the car, not because of the price.

[steinravnik]

Sorry, but that's just sad and hollow.

[post="54691"]<{POST_SNAPBACK}>[/post]

Like it or not, it's a reality GM has to deal with if it wants to be successful in the nation's largest auto market.

[Hogans_Heroes]

This interesting response to Wagoner's op-ed could well spark some discussion here:

http://www.nationalreview.com/nrof_comment...00512080857.asp

Poor Excuses from GM’s CEO
Rick Wagoner is either lying or blind when it comes to explaining the automaker’s fall.

By John Tamny

Rather than blame poor management for his company’s woes, General Motors CEO Rick Wagoner offered up contradictions and falsehoods to explain the automaker’s state of affairs in Tuesday’s Wall Street Journal. Although he acknowledged that GM lost a lot of money in 2005, Wagoner cited high gasoline prices, competition, lawsuit abuse, “unfair trading practices,” and remarkably GM’s own benevolence as the primary reasons for the company’s demise.

Addressing fuel prices, Wagoner said “GM offers more models that get over 30 miles per gallon (highway) than any other auto maker.” Despite its apparent competitive advantage given expensive fuel, three paragraphs later Wagoner added that “the recent surge in gas prices hurt sales.” The problem with the latter assertion is that Wagoner previously noted in the piece that GM has “been strong in truck sales” but “weaker in cars” — the very cars that would presumably be in demand given high gasoline prices.

On the competition question, Wagoner wrote of “intense competition” as a reason for GM’s struggles. Interestingly, he preceded his mention of the competition problem with citations of two independent studies: a Harbour Report that says GM possesses three of the top five most productive North American plants, along with a J.D. Power Initial Quality Study that says GM’s Buick and Cadillac brands rate ahead of competitors that include Toyota and Honda.

Toyota and Honda offer a worthwhile comparison. Both compete against GM around the world, and in doing so presumably face the same competitive pressures as Wagoner’s firm. Yet both Honda’s and Toyota’s stock prices are near all-time highs, while GM’s shares have fallen 76 percent since 2000. Nowhere did Wagoner see fit to ask whether his company is making automobiles that consumers simply don’t want. Lawsuit abuse in the United States? Honda, Toyota, and GM all suffer together.

Wagoner had an explanation for Honda’s and Toyota’s outperformance of GM, and predictably it had to do with “unfair trading practices,” in particular “Japan’s long-term initiatives to artificially weaken the yen.” Leaving aside the fact that money manipulation doesn’t change the real price of anything, not to mention that a strong dollar would drive down the costs of imported inputs that go into making GM cars, Wagoner’s assertion about Japan’s actions with the yen are blatantly false.

In reality, since the 1985 Plaza Accord, the yen has risen 45 percent against the dollar. In the 20 years since the agreement was reached, the stock prices of Honda and Toyota have respectively risen 922 and 1237 percent. During that same timeframe, the price of GM’s shares has fallen 14 percent. Contrary to Wagoner’s claim that U.S. automakers gain some kind of advantage when the dollar is falling, GM’s stock reached a 20-year high in 2000 when the dollar was bludgeoning the yen.

Regarding GM’s staggering “legacy costs” related to healthcare for employees, retirees, and dependents, rather than acknowledge the major mistakes made by GM management, Wagoner amazingly chose to cast the company’s profligacy in a benevolent light. In his view GM didn’t make foolish promises, but instead it and “other traditional manufacturing companies created a social contract with government and labor that raised America’s standard of living and provided much of the economic growth of the 20th century.” Carried to its illogical conclusion, Wagoner’s statement suggests that all bloated American companies should offer their employees major perks in the hope that more efficient American workers and companies will lower their own living standards in order to pay for the irresponsible actions of companies such as GM.

Notably, Wagoner said GM is “not looking for a bailout” in the same paragraph in which he said, “It’s critical that government leaders, supported by businesses, unions and all our citizens, forge policy solutions to the issues undercutting American manufacturing competitiveness.” Wagoner doth protest too much. He would like for all Americans to pay for GM’s poor management with a cheaper dollar and more government funding of healthcare. If they do, the lifestyles of GM workers will rise while the living standards of the rest of the country will fall.

[FUTURE_OF_GM]

Lawsuit abuse in the United States? Honda, Toyota, and GM all suffer together.

Not really... It's easier to sue an American company in America.

not to mention that a strong dollar would drive down the costs of imported inputs that go into making GM cars

Yeah, all 10-15% of them :rolleyes:

Regarding GM’s staggering “legacy costs” related to healthcare for employees, retirees, and dependents, rather than acknowledge the major mistakes made by GM management, Wagoner amazingly chose to cast the company’s profligacy in a benevolent light. In his view GM didn’t make foolish promises, but instead it and “other traditional manufacturing companies created a social contract with government and labor that raised America’s standard of living and provided much of the economic growth of the 20th century.” Carried to its illogical conclusion, Wagoner’s statement suggests that all bloated American companies should offer their employees major perks in the hope that more efficient American workers and companies will lower their own living standards in order to pay for the irresponsible actions of companies such as GM.

VERY subjective.

Notably, Wagoner said GM is “not looking for a bailout” in the same paragraph in which he said, “It’s critical that government leaders, supported by businesses, unions and all our citizens, forge policy solutions to the issues undercutting American manufacturing competitiveness.”

Obviously 2 different solutions to those who KNOW anything about business.

Wagoner doth protest too much. He would like for all Americans to pay for GM’s poor management with a cheaper dollar and more government funding of healthcare. If they do, the lifestyles of GM workers will rise while the living standards of the rest of the country will fall.

Complete :bs: and opinion..

Same sh*t; different day. More anti-GM spiel from an OBVIOUSLY anti-GM/Detroit author.

[thegriffon]

That's the reason Wagoner has to go. He must be blind far saying that our products are as good as the competition. Did he compare the interior materials with a ToyoHonda. The reason why people do not buy GM's cars is because they are NOT GREAT, just good enough. ( cheap interiors, 4-speed trannies....) He is just a business man, not a car lover.

Now, bring Mark Laneve in.

[post="54492"]<{POST_SNAPBACK}>[/post]

Don't be so blindly vindictive. Wagoner and GM know ther are improvements that need to be made, but he was addressing three big areas of misconception - productivity, quality and fuel-efficiency. For the rest—"Simply put, we are committed to doing a better job of designing, building and selling high-quality, high-value cars and trucks that consumers can't wait to buy. No excuses. We will step up our performance in this regard."