SimonDavid

You can't get angry with a guy for stating obvious facts of global economics. The american consumer is no longer willing to pay for these social contracts. That's why not just GM, but every one of those old line companies, either has gone or is going broke. It's like getting angry with Newton because you dont like gravity.

they could let the GMT355s grow a little with a V8 to justify the price and then import a really cheap small truck from South America - they still sell an updated S10 there

I read that the G6 convertible was held up as a prime example of everything that is wrong with GM's product development. It is basically the same car as the Epsilon SAAB 9-3 convertible which is already in production. Yet there is no possibility for interchangable parts between the 2 because everyone localised their epsilons just enough to make it impossible to build them somewhere else. So given all of GMs problems they should probably just save it for Epsilon 2 and do it properly. and I agree Pontiac is maybe not the brand for it anyway

SAAB IS GM'S ONLY PREMIUM BRAND OUTSIDE NORTH AMERICA Premium in Europe goes right down to Golf class and below - can you see Cadillac competing with the BMW 1-Series?

I think there is a radical message here for GM: Good products (H3, HHR, CTS, Cobalt) sell Bad products don't That would make a great MBA thesis wouldn't it?

I just had a crazy idea.. Seeing as Toyota can buy GM for loose change at current market prices that means GE can buy GM for loose change as well get GE Financial to run the pension fund and GMAC get Neutron Jack to really sort out the UAW and the middle management timeservers GE already has big centralised IT and engineering departments in India - big cost savings there.. and it stays American

There's only one quality test that matters and that's resale. Resale is the market's view of quality and the market is always right. It's resale that determines whether you have equity in the car at the end of the lease, and that will be key when you decide to stick with the same brand. Camry owners have consistently done well on this score over a long period of time.

There hasn't been a tie since GM bought out their JV partners in 2000. Other aircraft links un-advertised : Daimler-Chrysler owns Deutche Aerospace which owns about 40% of EADS (which owns 80% of Airbus) and about 40% of Eurofighter. Deutche Aerospace is formerly known as Mescherschmidt - only changed their name about 10 years ago when Daimler took them over. BMW started as an aero-engine company and their logo is a stylised propellor

Does anyone know what the Lambdas are going to be exactly? I always thought they were going to be a Chrysler Pacifica type vehicle / Rendezvous replacement / RX330 competitor But in another thread it is rumored that they may end up replacing GM360, which sounds like a very different type of vehicle any ideas?

I agree Griffon Im thinking of I guess a GMT360 based 120 Prado rival and also something more basic based on GMT355 - basically a cheap H3 The GMT360 would sell well in Australia, the GMT355 in South America, Africa, India If they're really doing global product development they should be able to do this. They are already building RHD H3s in South Africa, why not build the GMT355 there for world markets. Several carmakers are using South Africa as an export source - I think even BMW sources RHD 3 series from there

I agree with turbo200 Toyota would run them both alongside each other - I know that in Australia Toyota still sells many BOF Landcruisers. Launch Lambda with GMC/Buick first, drop the Envoy, and keep a Chevy GM360 for the BOF crowd. If GM gives GM360 an update and a new interior it will go on selling for a few years yet, maybe in slowly declining quantities like the Astro. In effect it's the same thing Cadillac has done with the DTS (and Lincoln with the Town Car) - those markets maybe in long term decline, but they're still big, and if the product is relatively recent then why not keep building it with a modest update?

The problem is that it is not brand new territory for almost every other company I worked at Bosch 5 years ago - we had one global capex and R&D budget. Australia was working on development programs that would end up never being built in Australia. Often Germany Australia and the US would be working on the same project simultaneously through sue of massive broadband connections for the CAD systems.

As I said in a previous post, yes GMAC is GM's cashflow darling and in a perfect world it would be nice to own all of it. However GMAC is now burdened by GM's junk credit rating, which makes very difficult for them to raise finance and probably makes their whole business unviable medium term. And if GMAC is unviable then who is going to support GM's sales with competitve finance? So GM will probably sell a majority of GMAC to a "strategic investor" (whose name probably starts with a K), then GMAC gets its investment grade back, then while GM has lost part of the cashflow at least they still have a strong finance partner who can support their marketing.

Between FIAT and the UAW GM has picked up some quality business partners over the years...... And it wasn't 2 billion - it was 4 billion, because GM's shares in FIAT were cancelled as part of the deal.

Both BB- and BB are classed as "sub investment grade", colloquially referred to as "junk"

These are the key quotes : So this is GM's game : - Sell a significant share in GMAC to a "friendly" investor (his name probably starts with a K) thereby freeing it from GM's credit rating and ensuring that it can go on financing cars even though GM is in chapter 11 - In the process ensure that GMAC is no longer liable for its (former) parent's pension liabilities - GM (but not GMAC)then declares chapter 11 - much easier to prove that it is insolvent as it no longer has GMAC's cashflows - In chapter 11 GM dumps alot of its pensions on the government's PGC and screws down the UAW - GM emerges from chapter 11 fully competitve and stripped of alot of legacy costs - GMAC continues to finance and support GM's sales throughout the chapter 11 process, thereby ensuring the basic viability of the business and the dealers

It's clear that GM needs a finance arm The problem is that GMAC cannot function much longer if it is part of General Motors - because it is linked to GM's low credit rating and therefore cannot tap the capital markets for finance. GMAC is currently using every trick in the book to get around this - securitising its receivables, selling off some subsidiaries - but it's not viable long term. It is better for GM to own 40% of a viable GMAC than 100% of a dead duck.

This guy has hit the nail on the head. If Delphi isn't viable hen GM isnt viable either - Delphi is just GM lite, making the same products with the same cost structure that ultimately go to the same end customers The only real difference is that GM sells to the general public, who will panic and stop buying the minute GM is put into chapter 11. Hence, as I said in another thread, I think Kerkorian will come in with a low ball takeover offer at the last minute and then take it on himself to bash down the UAW almost as much as chapter 11 would do.

GM needs a premium brand in Europe. The market in Europe is stratifying into Premium (BMW / Mercedes / Audi) who are going increasingly into smaller segments and low cost (Hyundai / Kia / Chevwoo) who are getting increasingly good product . Everything in the middle (like GM and Ford) are being squeezed. GM has attacked the low cost end brilliantly with Chevwoo, now they need to tackle premium with SAAB. What they need is a really stylish BMW 1-series / Audi A3 competitor based on a gussied up delta. I can't see a Cadillac badge on that product. In any case GM has already effectively closed SAAB as an independant entity by merging production and development with Opel, so it should not be a cost burden - rather it adds useful additional volume to Opel platforms.

GM's 20 billion in cash can disappear very quickly. Their cash outflow was something like 3 billion in the first quarter (cashflow is what is relevant not profit). So you do the math - it's not alot of quarters. And in reality it can all snowball much quicker than that - if they look like they're heading towards chapter 11 then the markets dump their bonds and their financing costs go through the roof, they could be in chapter 11 very quickly. The reality is that Delphi is just a former part of GM. So if the UAW cost structure is not viable at Delphi then it's not viable at GM either. It would however be the most complicated chapter 11 in history - GM's international operations would not be included. Who owns the brands? What happens to global product development? How long before Toyota starts sniffing around?

It won't end up at 11 billion - that's a worst case. I think GM has some sort of preferred charge over Delphi's assets in the case of that clause being triggered Also that potential 11bill is not a cash outflow - it would be an addition to GM's existing 100 odd billion of long term pension liabilities - the interest on it is dwarfed by the 2 billion a year cost savings from reforming Delphi

This is the key issue - GM pays a price premium of 2 billion a year in North America alone. This is the cost of 25 $/hour base wages and not being able to layoff UAW members. And that is just for Delphi - surely the UAW "tax" within GM's own business must be twice that. So that's 6 billion a year. Removing that tax is the real answer to GM's problems - it's more important than new product, better marketing or eliminating a brand. I am surprised GM got away with it for so long. But, however they managed it, those days are over.

Another thought, Is Toyota starting to "sniff around"? I mean it was very nice of them to snap up Subaru so cleanly. The last thing they want is GM in chapter 11.

So can I Do you think Kerkorian is just going to sit idly by as GM slides into chapter 11? This is the guy who spent years and millions sueing DCX. If thnigs look like going that way for GM he will demand that GM management demand Delphi style cuts from the union and if they don't he'll sue everyone and/or organise a shareholder revolt. Lutz worked with Jerry York at Chrysler and has been saying nice things about both him and Kerkorian.

in fact the more I think about it I bet the Casino guy is already lining up a dream team to run the company when he takes it private. Lutz has been saying nice words about him. So if GM hits the wall financially in a year they will have 3 choices : the weak option - continue with Wagoneer-style GM consensual management playing a nice tune on the deck of the Titanic the desperate option - file for chapter 11, but then it's a lottery, who knows what the result will be or Kerkorian comes in with a buyout offer to take the whole thing private - still dramatic cuts but at least it's not tied up in the courts.