SimonDavid

Yes the VW to US analogy is not a great But Merivas from Brazil and Astras/Zafiras from Poland sound good And it's great to hear from theGriffon that GM is really serious about global product development - how long until an Astra-based Cobalt replacement? (give us a hint...)

I was under the impression that the H2 was deliberately made heavy so that it could be classified as a commercial vehicle for tax purposes and therefore written off against tax. Is that true or just an urban myth?

The big flaw in all this is the UAW contract. GM saves no money by shutting down a plant because they have to keep paying people. So it is cheaper for them to put a $5000 rebate on an ageing vehicle than build less of them - that is the real issue. Their whole business model is based on production "pushing" the market rather than demand "pulling" production. For value pricing to really work they need the flexibility to build to demand - build exactly what the market is prepared to buy. Flexible plants and no jobs bank. A few years ago I was working for Kenworth Trucks, who I think are the only North American automotive company that has never had a losing quarter. Day one on the job they drum into you : "There is no such thing as a fixed cost. Everything is variable, including you" "We build what the market is prepared to pay sticker for" But hey that's a company whose CEO still owns 45% of the stock...

I worry that GM is not going to really follow through with this I don't think it's viable to import Opels to the US - the Euro is too strong. I mean think about it the only cars imported from Europe these days are Mercs and top end BMWs. Z4s X5s and Mseries are built in the US and Golfs are built in Mexico. And to get real Opels built in the US the delta and epsilon platforms will have to be globalised - that is years away - isn't it 2010 for Epsilon 2? I think between now and "global delta/epsilon" they will restyle the Cobalt with alot of Opel design cues, put a bit of extra money into the interior and build it in that plant that now has spare capacity..

I love it I hope the Antara becomes the Vue, and that this and the S3x become the next gen Equinox

If GM is really globalising platforms then there is going to be alot of pushing and pulling as the model cycles are synched up and that's sure to generate speculation, there's no way of getting away from it. I'd guess the architectures under threat are : - Aussie Zeta - maybe a short life before they move to a global Sigma-lite - Chi - US only, and is there really a demand for a next gen FWD land yacht? - European Astra platform - superceeded by Delta 2 ? - European Fiat Punto / Opel Corsa platform - not even released yet, but what's its future if Daewoo does all the next gen small cars? There are also probably some major sourcing changes as they start awarding supply contracts on a global basis - there was a bit of a fuss in Australia recently because the new Commodore's windshield is going to be made in Thailand. But it's all for the best long term, hopefully it means GM are taking some tough decisions

Is GM going to have a genuine minivan off this architecture? Or are they just sort of walking away from the segment?

I think because contracts are voided a strike is legal. Right now they are in a contract-less limbo But the court can also make orders - ie impose terms

Thanks Turbo200 that clears it up alot - GM is making EP2 truly global and streamlining product development Also the more I think about it it may not have yet affected the design studio source as much as the guy who work on platforms I was pondering his in an earlier post - if GM truly globalise their platforms then some of the current products are going to have weird model cycles as they align themselves around the world - but thats the one off price we have to pay

I think GMX 002 is/was the Ion replacement on Delta

Firstly Thankyou so much for this brilliant information. I guess there is a bit of disbelief on the forum, as this is such a bombshell. Secondly Could you please give us your gut feeling - is this cause for optimism or pessimism? What midsizers do GM expect to sell around that time - Daewoo based product? I didn't realise realise that it was the Epsilon 2 versions that were being cancelled. I was hoping it was just a delaying of the projects to bring them onto Epsilon 2...and therefore facilitating global product development, not moving away from it. Is my earlier pessimistic post justified? ie my cynical gut feeling that GM is simply running out of cash and is not going to spend money on anything that far out - "let's see what kind of company we have left after we emerge from chapter 11"

Is this anything to do with Jerry York now being on the board? There could be a perfect storm here : - GM takes 10 billion pension hit from Delphi? - Delphi going on strike? - Kerkorian and York put everything under scrutiny?

If this means GM is getting serious about global product development then it's great news. But I have a sneaking suspicion that it's really about money - the board is saying "everything that is not going to hit the market in 06 / 07 is under review, until we find out if we are going to avoid ch11" Like Winston Churchill in 1940 "Stop work on any ship that will not launch before 1942 - otherwise they will end up in the German navy anyway"

I think the significance is that Henderson has been GM's "Mr fix-it" for years. If you look at his record he makes the tough strategic decisions that the previous management had been avoiding.

I agree - wagoneer is in over his head. Actually the reason he is there I think is because the stakeholders (UAW, dealers, middlemanagement) all know he will never make a tough strategic decision, but just keep trying to fiddle at the edges Gorbachev-syndrome

Thankyou - that was the best explanation ever Only one thing I don't understand - why would GM build both Sigma-lite and VE in the US, if they are both similar size similar cost and completely different build sequence? Or maybe VE will be import only for relatively low-volume nich products (GTO? Roadmaster?), and Sigma-lite is the high volume US build Caprice / Camaro. Any ideas? In any case its good news, and the sooner the better

It was developed in Brazil, it's not on Epsilon like the European Vectra, it's based on the previous generation Astra platform taken to the limit. Epsilon would have been too expensive for sth america, whereas Astra has been in production for a while and has a high local content.

Zeta's platform is not based on Sigma (that's is the problem), it's a heavily modified Commodore platform with Sigma based suspension. But being Australian it is relatively high cost. So before they bring it to the US they had to take some cost out, hence Zeta-light. Either way I hope the result is striking, GM could really use a Mustang / 300C competitor.

There was a big article on GM in the editorial page of the London Financial Times last weekend. Key points : - GM's cash cushion of 19billion will last maximum 3 months in event of a strike by Delphi. - GM at the moment is not really a business - it's a social welfare system - No company has ever been refused chapter 11 because they applied too early - Selling good assets (like GMAC) to finance cash burn will only delay the inevitable and make it less likely that a viable business will emerge from Ch11 - Few people really understand the chapter 11 process : The main beneficiaries of chapter 11 will be the retirees (who effectively own the company already as they are the largest claimant on its assets) because it is the only way of preserving a viable business from which to pay their benefits. Shareholders will be the biggest losers as their stock becomes worthless. Bondholders may lose, but then they are losing already as their bonds are rated junk. Employees will lose but then they are also future retirees (in fact many of GM's employees are close to retirement age so really they should be more worried about their pensions than pay rates). - The interests of current management (which effectively includes the UAW) in this matter are clearly not the same as the interests of the company.

Is it just me that thinks the Cadillac version of this is a little superfluous? I think they should leave the BLS / BRX market to SAAB

If Wagener and the GM board are smart they would use Kerkorian - he could be very useful in extracting concessions from the UAW and generally shaking up the bureaucracy. I think that Lutz gets this point - he said in an interview that he'd have no problem with Kerkorian having a seat on the board. The seat in practice would be held by Jerry York - who Lutz worked with at Chrysler. So it could be recreating the old Chrysler dream team. Also Jerry York was CFO of IBM in the 90s when Gerstner was doing his massive restructuring there, so this is not exactly a new scenario for him.

Their points are valid, but it does not change the fact that the company is leaking cash at the rate of 2 billion a quarter - 19 billion will not last long. And you can't simply devide 19 by 2 to find the number of quarters - as a company goes downhill things snowball - consumers back off and banks and suppliers start tightening credit. You rapidly reach a tipping point. But I agree that this would not be a straight forward chapter 11 - the affect on consumer confidence - there's little long term risk when you buy a flight - GM does have valuable brands, wheas in the airline industry the brand is meaningless - airline travel is a classic commodity - the presence of Kerkorian as a shareholder - he's not in the habit of just watching a couple of billion evaporate - would another automaker be tempted to swoop in at the last minute?

What happens in bankruptcy - - The stock becomes worthless, as stated above the old stock is usually cancelled - The company effectively comes under the control of the court during the restructuring period - any major new spending or cash disbursements need to be authorised by the court - Labor contracts are rewritten - Delphi is getting a short time to reach a new agreement with the union, after that the court can just impose terms. The UAW can legally strike but the company can legally hire a new workforce. - Legacy costs will be cut down significantly - Overseas operations will not be affected - The big question mark is the affect on consumer confidence - I think this is the first time a company selling a consumer durable to an end customer has done chapter 11 - there is very little risk when you buy a flight from an airline in chapter 11, but buying a car....

Ive heard VE described in Australia as basically the old Opel V platform, updated alot, with sigma suspension hung off it. So very much a "pre-globalisation" project the suspension has commonality with sigma but the underlying body structure is completely different and it is not interbuildable with sigma Also because it was developed in Australia with the local market in mind the engineering would have focussed on Holden's local supply base, which is not very world - competitive, expecially as the aussie dollar has strengthened alot since then