Drive My Car

Click on the orange link below to read a review of Once Upon a Car: The Fall and Resurrection of America's Big Three Auto Makers by Bill Vlasic.

http://josephsreviews.wordpress.com/2012/04/16/drive-my-car/

Experts: GM bankruptcy won't be the easy way out

Will bankruptcy save General Motors, or is it too late? Click on the orange link below to read the article.

Sorry, but we couldn't resist posting a photo of our old favorite GM executive, Rick Wagoner. (Ole Rick was demonstrating the small battery that would power the Chevy Volt, which remains vaporware as of this date.)

Experts: GM bankruptcy won't be the easy way out

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Photo: flickr (Grist.org)

Government Motors...

Cartoon by Tom Meyers, San Francisco Chronicle.

So long little Ricky (Wagoner)!

If the Associated Press is right, we may have the first good news from Detroit in quite a while. According to the AP, General Motors CEO Rick Wagoner is steping down immediately "at the request of the White House." Wagoner's leadership has been tone-deaf from both a political and public relations standpoint for months. Back when he flew by corporate jet to testify before Congress, we immediately asked the question: Why didn't he drive? Many others came to ask the same question.

Could it be that Wagoner actually believed that GM was building better cars, and yet simply felt they were not good enough for his butt to sit in?

We also noted, back at the time of the first hearing, that Wagoner read his comments from scripts and, strangely, didn't seem capable of answering questions on his feet - even while sitting.

In a final irony, Wagoner said on December 4, 2008, that he would not leave GM as, "I'm doing what I do because it adds a lot of value to the company." Not anymore, bud. You might think about taking a Chevy Cobalt with you for the drive home.

Starbucks Seems to Be Trying, But...

The staff members at my local Starbucks shop seem to be trying harder. After a few months of being grumpy, they're friendly again, and actually smile and talk to the customers. And this shop now has more staff working during the morning hours; at least one and sometimes two additional "bearistas" brewing and serving. OK, so this is the good news.

The bad is that they seem to be having new problems with supplies of everything from coffee beans to...

For example, three mornings ago, the posted bold coffee was Ethiopa Sidomo. Now this sounded good! Well, by the time I got to the front of the small line, I was told they were out. What?

A bear-brewer ran into a back room and came out with a bag of Verona beans. This meant a wait of at least 8 to 9 minutes for this new, less bold, coffee to be brewed. Not so good.

Oh, and the coffee lids never seem to fit right now. This very morning, a staff member opened a second bag of lids for my Tall drink and complained out loud that the lids in stock are not fitting. (You'll notice this when your coffee drink spills all over your clothes as you walk away from the counter.)

Then there are the cheaper napkins in stock. They may be more natural but they also look and feel cheap. And then...

Well, there's no need to go on any further. Again, I feel like someone has instructed or trained the Starbuckers to work harder and be nicer. This is positive. It's just a shame that the resources they have to work with seem to be fading away faster than GM stock loses money (and our taxpayer-provided bailout funds).

Sad to Say He's Sorry?

My most recent post about the automobile industry was on Valentine's Day Eve, when I disagreed with the assessment of the L.A. Times that the Saturn Sky/Pontiac Solstice was an exception to the bad designs coming out of Detroit. The Times called that two-company model a hit and I called it a miss. Now, according to the ChattaBox website: "GM has announced that they will be shutting down Saturn dealerships, and that no other Saturn(s) will be manufactured after 2011. They are also planning to begin phasing out the Pontiac (brand)."

This is sad news, which I don't really think is simply an outgrowth of poor design; more of poor manufacturing and bad decisions that came from CEO Rick Wagoner on down. The poor manufacturing issue may actually go back decades with Pontiac. Think about the '60s-era classic Mustangs, Camaros and Firebirds. I don't know about you, but I still see a lot of the original Mustangs on the road, along with a few of the Camaros. The Firebirds - nope.

So more American jobs will be lost, at both the manufacturing and retail end. Will Rick Wagoner ever be sad enough to say he's sorry?

Note: The photograph, above, is of the Pontiac Solstice coupe, an allegedly better looking version of this car; and one that I have never seen on the roads/streets of the U.S.

When is a Hit a Miss?

Recently, Bob Lutz, a vice chairman of global product development and de-facto design chief for General Motors, retired. The Los Angeles Times produced a photo-essay of the many cars developed under Lutz' watch and split them into hits and misses. One of the cars they listed as a "hit" - the Saturn Sky/Pontiac Solstice - is to me a definite miss.

The first thing that's clear when you see a Sky or Solstice pass by on the street is that the front end and the back end not only do not match, they seem to have no relationship to each other. The front is low, thick and busy; the back is high and plain except for some odd accents that call to mind Bruce Wayne's Batmobile.

Then there's the black convertible tops that seem far too small, as if they'd been snatched off of the Mazda Miata production line. Yes, the alleged Solstice couple looks better, in photographs, but I've never seen one in the real world.

The Miata is still classic because it was meant to look like a '50s era British roadster. The underpowered English roadsters managed to cut through the wind due to their simple aerodynamic designs; the fewer lines and bulges the better. Sad to say, the Sky and Solstice look like Saturns and Pontiacs, products of busy American design. They may be better looking than your average Ford Mustang, but that's damning with faint praise.

Finally, some common sense... (from Steven Korman)

Steven H. Korman is the CEO of Korman Communities, a 500-employee real estate company in Plymouth, Pennsylvania. On Thursday, February 6, 2009, he ran a full page open-letter advertisement in both the Philadelphia Inquirer and the New York Times urging executives of top companies to halt lay offs and "keep... employees working."

In this letter addressed to several companies in which he holds stock - including Apple, Caterpillar, Chevron, Cisco Systems, Coca-Cola, Dow, DuPont, General Electric, Intel, Johnson & Johnson, Kraft, Nokia, Oracle and Pfizer Inc. - Korman wrote, "I own stock in many of these companies [that are laying off workers] and would prefer that the company make a smaller profit and the stock fall, in the short term, rather than affect the lives of our neighbors and their families as jobs are lost." He added that laid-off workers and those fearing layoffs are reluctant to spend money, worsening the impact of the recession.

In a follow-up interview on MSNBC today, Korman noted that when companies avoid lay offs they not only keep their line staff but also their executives. He made the key point that when companies are loyal to their employees and administrators, that loyalty is usually re-paid. Studies indicate that executives who feel that they've received strong support throughout their careers will often turn down higher paying offers at other companies. Yes, loyalty is its own reward.

Korman Fed-Ex'd signed copies of his letter to the heads of each of the companies listed above. How many have responded to him? None. Let's hope he also sends copies to companies such as General Motors, Nike and Starbucks. Who thinks that GM CEO Rick Wagoner would read his copy?

All in all, Mr. Korman represents a breath of fresh air at a time when we seem to be drowning in a sea of old and ineffective ideas.

How Does This Make Sense?

According to the Associated Press, General Motors (GM) has already received $9.4 billion in government bailout funds - that's money that came from you and me - and expects to get $4 billion more in March. In other words, GM is burning through money like there's no tomorrow. Perhaps there isn't because, as explained in the book Burn Rate, the closer a company gets to dissolution the faster it burns through money in a failed attempt to stay in business for another day, week, or month.

However, after taking this type of money - and, remember, we're talking billions not millions here - you would think that GM would be SAVING the jobs of its workers. Not so, as GM today announced an immediate reduction of 10,000 autoworker jobs worldwide, with media sources reporting that these workers will not be offered buyout options. So then what is OUR money being used for?

Oh, we're told, calm down because GM CEO Rick Wagoner is going to work for just $1 a year. Too late, the bad decisions made by Wagoner and his management team have already resulted in these tragic job losses and what appears to be a continuing dim future for what MSNBC said was formerly America's greatest company. Wagoner could elect to work for a nickel this year, and it wouldn't change the fact that the flight of the once-mighty GM is about to come to an end. Brace for impact.

Like a lot of people, I'm looking forward to seeing...

The brand new 2009 Chevy Camaro from General Motors (it's the car to the left in the above photo). But a Tom Hilland of Denver doesn't have a lot of love for old GM as reflected in this interesting letter published in the January 2009 issue of Motor Trend:

With rare exceptions, European and Japanese cars-vehicles are just better put together and offer a much better driving experience. The Big Three have insulted potential buyers for so many years their customer base has evaporated. While GM was still offering its obsolete four-speed auto and thrashy V-6s, its competitors did the opposite with refined five and six-speed transmissions and smooth, well-presented engines with truly luxurious interiors. While the domestics played with their trucks and the imports obliterated them from the market, the choices became obvious as to which was the better buy. Motown Myopia? Musclecars are so 1950s in the 21st century. We don't need them, no matter the form, in 2009 or the future.

(I wonder how Mr. Hilland really feels? Hey, if Rick Wagoner's driving one, I want one!)

The pain at NBC

We were not big fans of the National Broadcasting Company's (NBC) televised coverage of the recent summer Olympics from China which relied on "experts" like Chris Collingsworth -- a former football player, for goodness sakes -- and some tired anchors whose names I won't publicize any further. Oh, and then there were the old and tired camera angles used while broadcasting the women's and men's marathons... Let's see, there was the camera in front of the pack, the camera at the back and the helicopter shot that made Beijing look like nothing more than downtown Los Angeles/Burbank.

Just two cameras were used during the track and field events. One camera was placed in front of the runners and the other was placed at the side of the track. Gosh, that was so interesting and so 1950s-like.

But NBC hasn't gotten the expected bounce from that coverage. Instead, its fortunes seemed to have waned as reflected in these comments -- from the last two days -- from two different print media sources. First, USA Today wrote on Tuesday about, "NBC, a network that can't borrow a good idea to save its soul." Today, the San Francisco Chronicle noted the foolishness of having in 2004 promised Conan O'Brien -- originally hired as nothing more than a tall comedy writer -- Jay Leno's job in 2009. But the network did and recently attempted to salve this wound by giving Leno a 5-day a week 10:00 p.m. slot. The Chronicle noted that this agreement degrades both O'Brien's value and that of "The Tonight Show," as Leno should retain the clout to host the very best guests and hire the best writers. Agreed.

But the Chronicle did not stop there. It went on to state, "NBC executives can't program. Period. The network... slid from first to fourth and can't create or sustain hits. Despite a relentless marketing campaign around the Summer Olympics, NBC's fall programming imploded, its midseason offerings are not generating any excitement, and it just lost five hours of prime-time programming. Ladies and gentlemen, meet the (winless) Detroit Lions of broadcast television."

So what are the odds that Rick Wagoner will bolt from General Motors to lead NBC? It'll be an oh-so short flight from Detroit to beautiful downtown Burbank's Bob Hope Airport on a luxury leased jet.

They're just plain wrong, again...

One of the arguments heard even today from the Big 3 automobile companies is that the spectre of - or even the hint of possible - bankruptcy will keep Americans from buying their cars. Rick Wagoner, the CEO of GM, told the U.S. Senate that 80% of Americans would refuse to buy a car from a company that had filed for bankruptcy. A new USA Today/Gallup Poll indicates that this line of argument is simply wrong; flat out wrong.

This poll asked the question: Would the auto companies filing bankruptcy make you less or more willing to buy an American car? Three out of every four respondents, 75%, said it would not affect their decision. A higher number, 82%, said they would consider buying a Detroit-branded car in the future. And 57% of Americans still believe - although we don't - that all three major American auto companies will survive.

So, just because a highly-paid auto executive or a highly-paid spokesperson says something is true doesn't make it so. For some reason, the auto executives continue to discount the option of bankruptcy even if it might be the very medicine their ailing companies need. As was so well-stated by Aaron Bragman, an IHS Global Insight analyst, "It is one of the big contentions the auto industry has made, that people will not buy from a bankrupt company. They have fought bankruptcy tooth and nail."

We're not saying that bankruptcy would or would not fix things, simply that the debate needs to be centered around honest arguments based on factual research, like this latest poll.

Should Rick Wagoner Be Kept On As Chief of GM?

From the Associated Press, Monday, December 8, 2008:

Chicago - An influential senator drafting a multibillion-dollar bailout for Detroit's Big Three automakers said Sunday that the head of General Motors should step down, while President-elect Barack Obama accused car industry executives of a persistent "head in the sand" approach. Sen. Chris Dodd, D-Conn., chairman of the Banking Committe, said GM CEO Rick Wagoner has to move on as part of a government-run restructuring that should be a condition of financial life support for the auto industry. "I think you have got to consider new leadership," Dodd said on CBS' "Face the Nation."

GM spokesman Steve Harris said the company appreciates Dodd's support for the (bailout) loans, but added, "GM employees, dealers, suppliers, and the GM board of directors feel that Rick is the right guy to lead GM through this incredibly difficult and challenging time."

Still another reason G.M. is in the state it's in...

This weekend's Wall Street Journal (December 6-7, 2008) contained an article, "Corporate Failures Hit Health Plans for Corporate Workers", that would seem to be unrelated to what is going on at General Motors. But, in the second part of the article, we read that in the service bay of a Chevrolet dealership in Georgia "an executive boomed over a loudspeaker that the car dealer, which had survived since the Great Depression, was closing. ... (the employees health) insurance was terminated."

Mr. G., a finance manager for the dealership, was in a panic. Why? Because he'd "bought a $60,000 BMW the day before." Now Mr. G. is selling the BMW as his family has $40,000 in medical bills and are two months behind on their mortgage.

Do you think it ever dawned on Mr. G. that by buying an expensive BMW, made in Germany, he was pounding a coffin's nail in the American corporation he indirectly worked for? Who was it that said, "Let's pay attention, people!"

Why General Motors Fell...

The latest issue of Fortune Magazine is well worth buying to read the excellent article by Alex Taylor, "GM - Death of An American Dream: How General Motors got it wrong for so long. A corporate memoir." Below you will find a couple of brief excerpts from the article and, yes, Taylor describes the shock among reporters "on the day in October 1999 when GM revealed the Pontiac Aztek... for the first time." The oh-so-beautiful and practical Aztek. (Enough said on that subject.)

On the positive side, Taylor provides some hope that bankruptcy will enable GM to continue to survive and perhaps to even return leaner and meaner.

Excerpts:

In working for the largest company in the industry for so long, they became comfortable, insular, self-referential, and too wedded to the status quo - traits that persist even now, when GM is on the precipice. They prefer stability over conflict, continuity over disorder, and GM's way over anybody else's. They believe that hard work will overcome adversity, and that tomorrow will be better than today - despite four decades of evidence to the contrary. In many ways the story of General Motors since the 1960s is a tale of accelerating irrelevance. Customer preferences changed, competition tightened, technology made big leaps, and GM was always driving a lap behind. It became a red-state company, its Buicks and Pontiacs seldom seen in California or New York City.

Ask Rick Wagoner why GM isn't more like Toyota, and he'd tell you, "We're playing our own game - taking advantage of our own unique heritage and strengths." Turns out GM should have forgotten that and become more like Toyota. Toyota's market cap is now $103.6 billion.

... You have to wonder whether the insular, self-absorbed culture that still dominates GM is up to the job of restructuring the company quickly enough to make it profitable and competitive again. ... As painful as bankruptcy will be, it would give GM the leverage it needs to redo its labor contracts and dealer franchise agreements, downsize the company, recruit new management, and position itself for an economic upturn... that would enable it to regain some fraction of its former glory.

Burn rate

Today's most shocking headline: Big 3 automakers admit that mistakes were made. Wow! And General Motors claims that it needs $4 billion in order to stay open for the next 20 days. Now that sounds like a great investment, does it not?

If there's one leason to be learned from the fall of Enron it is that a company's burn rate - basically the speed with which it sets fire to money in a futile effort to stay alive - increases as it approaches dissolution. Do we really want to give GM more money to burn?

Cutting through the fog...

There seems to be a great deal of confusion over what exactly is ailing the Big 3 U.S. automobile companies, apart from a recession, poor leadership, a lack of focus on vehicles that get excellent gas mileage (which should be the real job one), new ideas and a proper vision of the future. A Sacramento-area car dealer, Scott Lasher of Lasher Auto Group, did a succinct job of clarifying matters in his comments to the Sacramento Bee on November 30, 2008. Lasher said that the number of dealers selling U.S.-brand cars will have to shrink. Four of his five major dealerships sell foreign cars.

Domestic automakers "built a business plan on owning 75 percent of the market... and they now have 45 percent of the market. The reality is, there are too many dealers, the domestic side more than the imports."