General Motors: Sales, Marketing, and Financial News
02-08-2006, 11:47 AM
#321
Not Asian
Originally Posted by Maximized
Good move. Doesn't seem to be affecting GM's stock too much. I'd reduce the dividend in half again in the third quarter of this year.
02-10-2006, 05:17 PM
#322
I feel the need...
UAW Chief Courting Oblivion With Inflexible Stand: Doron Levin
2006-02-10 00:25 (New York)
(Commentary. Doron Levin is a Bloomberg News columnist. The
opinions expressed are his own.)
By Doron Levin
Feb. 10 (Bloomberg) -- Most labor leaders try to ensure the
well-being of workers and the survival of their unions. Not Ron
Gettelfinger, president of the United Auto Workers union.
He's about to ensure that his union will have little or no
importance in the future of the U.S. auto industry as he pushes
the world's No. 1 automaker and employer of tens of thousands of
workers toward bankruptcy.
Gettelfinger ought to be explaining to UAW members at
General Motors Corp. (and Ford Motor Co. and DaimlerChrysler AG)
the hard truth -- openly and plainly -- that above-market wages
and lavish benefits were great while they lasted, but have come
to an end. Trying to hold on to them to the bitter end will only
cause companies to fail and lead to massive job losses.
He could explain the unpleasant reality that reducing pay
and benefits will save companies and many jobs. Resisting the
inevitable is futile, since judges can and will void union
contracts.
Instead, the UAW leader asserted this week that the union is
done granting concessions to faltering GM, which is just coming
off an $8.6 billion annual net loss and whose bonds are rated as
junk.
Last year the UAW agreed to revisions to its health-care
plan. And the union may let GM pay workers to quit. GM, on the
other hand, can forget about phasing out its ``jobs bank,'' a
company-sponsored welfare program that pays hundreds of millions
of dollars annually to laid-off workers.
Demanding More
The UAW historically has demand improved salary and benefits
during each contract period. Union leaders don't give back; they
demand more -- except in rare instances such as when Chrysler
Corp. was close to bankruptcy in the early 1980s. Those
concessions were temporary, to be repaid when hard economic times
ended and Chrysler recovered.
What Gettelfinger hasn't figured out, or doesn't want to
acknowledge, is that the good old days aren't coming back. The
business model of Detroit-based automakers is broken; they are
unable to earn a profit even as the U.S. economy prospers. The
U.S. industry's oligopoly, which created a cartel for union
labor, exists no more.
The UAW has wasted time and members' dues in Washington,
trying to recreate trade barriers and turn back history. That
energy would have been better devoted to finding relevance in a
post-Toyota world.
Lack of UAW cooperation to reduce labor costs helped drive
Delphi Corp., GM's former parts subsidiary, into bankruptcy in
October. Within the next few weeks, Delphi Chairman Steve Miller
may ask the bankruptcy court to void its UAW contract. If the UAW
strikes at Delphi, as it has threatened, the consequent shortage
of parts will shut GM assembly lines.
Wishful Thinking
Rick Wagoner, GM's chief executive officer, must have
thought himself a master of compromise on Feb. 6 when he imposed
50 percent reductions of the company's common stock dividend,
directors' salaries and his own base pay. He slashed other
executive salaries and signaled a freeze on pension benefits for
white-collar GM workers.
The next day, Deutsche Bank AG's Rod Lache, an equity
analyst, dropped his rating on GM shares to ``sell'' from
``hold,'' citing, in part, an ``increasing likelihood of
confrontation with the UAW.''
GM's cost-cutting moves -- not coincidentally -- happened
the same day that Jerry York, an associate of billionaire Kirk
Kerkorian, who has invested $1.7 billion in GM stock, joined GM's
board.
Time Is Short
York, a financier with roots in the auto industry who helped
engineer the turnaround of International Business Machines Corp.
in the mid-1990s, came to GM on a platform of shared sacrifice
among executives, managers, unions, shareholders and other
constituencies in order to avert a bankruptcy.
Wagoner knows time is short for proving to shareholders like
Kerkorian and the GM board that he can halt the company's
financial and market-share losses. Inviting York on-board bought
breathing room. The dividend and executive pay cuts had a larger
purpose as well: to provide Gettelfinger with the justification
for asking his union to help save GM even more money.
But the union leader isn't playing ball. He faces re-
election in June, as well as union dissidents who would paint his
cooperation with GM management as a sign of betrayal.
Gettelfinger is in a tight spot. It's time to find out what he
really believes.
No Bluffing
Gettelfinger might be bluffing, stalling for time in the
event GM's sales suddenly perk up and relieve the financial
pressure and the need for sacrifice.
I don't think it's a bluff. Gettelfinger appears to have
decided it's preferable for the UAW to ride the sinking ship of
an industry to the bottom of the ocean.
Bankruptcy won't necessarily destroy GM, as the bankruptcy
of United Airlines parent UAL Corp. suggested. Employee unions
eventually are forced to accept lower wages and benefits, their
leaders humbled and humiliated. A smaller, weaker company,
employing far fewer workers can emerge from bankruptcy, as UAL
did last week.
Since Gettelfinger understands the situation, the real
question is why he won't circumvent the expense, futility and
pain of bankruptcy and lead the UAW to a better destiny? His
spokesman didn't return my phone calls.
--Editors: Greiff (shw).
Story illustration: See {GM US <Equity> CH1 Q <GO>} for a
chart of GM'S quarterly financial reports.
source: bloomberg
2006-02-10 00:25 (New York)
(Commentary. Doron Levin is a Bloomberg News columnist. The
opinions expressed are his own.)
By Doron Levin
Feb. 10 (Bloomberg) -- Most labor leaders try to ensure the
well-being of workers and the survival of their unions. Not Ron
Gettelfinger, president of the United Auto Workers union.
He's about to ensure that his union will have little or no
importance in the future of the U.S. auto industry as he pushes
the world's No. 1 automaker and employer of tens of thousands of
workers toward bankruptcy.
Gettelfinger ought to be explaining to UAW members at
General Motors Corp. (and Ford Motor Co. and DaimlerChrysler AG)
the hard truth -- openly and plainly -- that above-market wages
and lavish benefits were great while they lasted, but have come
to an end. Trying to hold on to them to the bitter end will only
cause companies to fail and lead to massive job losses.
He could explain the unpleasant reality that reducing pay
and benefits will save companies and many jobs. Resisting the
inevitable is futile, since judges can and will void union
contracts.
Instead, the UAW leader asserted this week that the union is
done granting concessions to faltering GM, which is just coming
off an $8.6 billion annual net loss and whose bonds are rated as
junk.
Last year the UAW agreed to revisions to its health-care
plan. And the union may let GM pay workers to quit. GM, on the
other hand, can forget about phasing out its ``jobs bank,'' a
company-sponsored welfare program that pays hundreds of millions
of dollars annually to laid-off workers.
Demanding More
The UAW historically has demand improved salary and benefits
during each contract period. Union leaders don't give back; they
demand more -- except in rare instances such as when Chrysler
Corp. was close to bankruptcy in the early 1980s. Those
concessions were temporary, to be repaid when hard economic times
ended and Chrysler recovered.
What Gettelfinger hasn't figured out, or doesn't want to
acknowledge, is that the good old days aren't coming back. The
business model of Detroit-based automakers is broken; they are
unable to earn a profit even as the U.S. economy prospers. The
U.S. industry's oligopoly, which created a cartel for union
labor, exists no more.
The UAW has wasted time and members' dues in Washington,
trying to recreate trade barriers and turn back history. That
energy would have been better devoted to finding relevance in a
post-Toyota world.
Lack of UAW cooperation to reduce labor costs helped drive
Delphi Corp., GM's former parts subsidiary, into bankruptcy in
October. Within the next few weeks, Delphi Chairman Steve Miller
may ask the bankruptcy court to void its UAW contract. If the UAW
strikes at Delphi, as it has threatened, the consequent shortage
of parts will shut GM assembly lines.
Wishful Thinking
Rick Wagoner, GM's chief executive officer, must have
thought himself a master of compromise on Feb. 6 when he imposed
50 percent reductions of the company's common stock dividend,
directors' salaries and his own base pay. He slashed other
executive salaries and signaled a freeze on pension benefits for
white-collar GM workers.
The next day, Deutsche Bank AG's Rod Lache, an equity
analyst, dropped his rating on GM shares to ``sell'' from
``hold,'' citing, in part, an ``increasing likelihood of
confrontation with the UAW.''
GM's cost-cutting moves -- not coincidentally -- happened
the same day that Jerry York, an associate of billionaire Kirk
Kerkorian, who has invested $1.7 billion in GM stock, joined GM's
board.
Time Is Short
York, a financier with roots in the auto industry who helped
engineer the turnaround of International Business Machines Corp.
in the mid-1990s, came to GM on a platform of shared sacrifice
among executives, managers, unions, shareholders and other
constituencies in order to avert a bankruptcy.
Wagoner knows time is short for proving to shareholders like
Kerkorian and the GM board that he can halt the company's
financial and market-share losses. Inviting York on-board bought
breathing room. The dividend and executive pay cuts had a larger
purpose as well: to provide Gettelfinger with the justification
for asking his union to help save GM even more money.
But the union leader isn't playing ball. He faces re-
election in June, as well as union dissidents who would paint his
cooperation with GM management as a sign of betrayal.
Gettelfinger is in a tight spot. It's time to find out what he
really believes.
No Bluffing
Gettelfinger might be bluffing, stalling for time in the
event GM's sales suddenly perk up and relieve the financial
pressure and the need for sacrifice.
I don't think it's a bluff. Gettelfinger appears to have
decided it's preferable for the UAW to ride the sinking ship of
an industry to the bottom of the ocean.
Bankruptcy won't necessarily destroy GM, as the bankruptcy
of United Airlines parent UAL Corp. suggested. Employee unions
eventually are forced to accept lower wages and benefits, their
leaders humbled and humiliated. A smaller, weaker company,
employing far fewer workers can emerge from bankruptcy, as UAL
did last week.
Since Gettelfinger understands the situation, the real
question is why he won't circumvent the expense, futility and
pain of bankruptcy and lead the UAW to a better destiny? His
spokesman didn't return my phone calls.
--Editors: Greiff (shw).
Story illustration: See {GM US <Equity> CH1 Q <GO>} for a
chart of GM'S quarterly financial reports.
source: bloomberg
02-10-2006, 05:45 PM
#323
Originally Posted by phipark
Well, just to let you guys know, they have suspended my 401k match. Sons of bitches.
02-10-2006, 11:59 PM
#324
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Originally Posted by zeroday
would you prefer to lose your job? face reality, your company is going down the toilet unless you and your fellow co-workers suck it up and take some personal responsibility (like allowing the UAW to lower benefits and wages) you're all done for. GM will survive the bankruptcy, your jobs will not.
They'll find a way to expand their homes with a tenth game room and fifth minibar.
02-14-2006, 06:55 AM
#325
Safety Car
$500,000,000
http://money.cnn.com/2006/02/14/news/companies/gm_plants/index.htm
Reports: GM to invest $500M in Michigan
Troubled auto manufacturer poised to pour cash into five plants, add hundreds of jobs, even as it moves to close other facilities, papers say.
February 14, 2006: 7:22 AM EST
NEW YORK (CNNMoney.com) - General Motors Corp. is expected to announce a $500 million investment in five Michigan plants, according to published reports, even as the company struggles with ongoing losses and moves ahead with plant closing plans.
Reports said GM will add several hundred jobs at the plants as part of the planned investment. In November, GM announced it planned to close 12 plants and facilities and trim 30,000 hourly jobs in North America as it cut capacity in an effort to stem ongoing automotive losses. Several of the locations being hit by closure plans are in Michigan.
GM lost $8.6 billion in 2005 and in January it announced it was cutting the company dividend 50 percent, as well as cutting pay for officers and board members and trimming medical and retirement benefits for salaried retirees.
GM said it will make an announcement about five Michigan plants at 2 p.m. ET at its Pontiac Centerpoint Campus in Pontiac, Mich., at an event to be attended by Gov. Jennifer Granholm and a number of county and local elected officials.
The Detroit News and Detroit Free Press both report the announcement will target the investment to GM's Pontiac Assembly Center and Pontiac stamping plants, an engine plant in Romulus, a transmission plant in Ypsilanti and the ultra-modern Lansing Grand River assembly plant.
The Lansing Grand River assembles the Cadillac CTS sedan and STS, which have been a success story for GM, posting solid sales gains at a time its overall U.S. sales fell 4.3 percent. It has about 1,800 employees and opened in 2001.
The News reports the investment will result in 200 jobs, while the Free Press said it will result in nearly 300.
The announcement is an important piece of good news for the Michigan economy, which in addition to the GM plant closings is also facing a plant closing in Wixom, Mich., by Ford Motor Co. (Research) as that company has announced its own plans to close 14 plants across North America and cut 30,000 jobs.
The state has also been battered by the bankruptcy and a management demand for sharp pay and benefit cuts at the nation's largest auto parts maker, Troy, Mich.-based Delphi. Numerous smaller auto parts makers are also in bankruptcy or in financial trouble as the financial woes of the auto manufacturers hit their sales.
Michigan lost about 20,500 manufacturing jobs in 2005, according to Department of Labor figures, or about 3 percent of that job base, during a time when manufacturing jobs nationwide declined less than 1 percent. The state was responsible for about one in four lost manufacturing jobs nationwide during the year.
Reports: GM to invest $500M in Michigan
Troubled auto manufacturer poised to pour cash into five plants, add hundreds of jobs, even as it moves to close other facilities, papers say.
February 14, 2006: 7:22 AM EST
NEW YORK (CNNMoney.com) - General Motors Corp. is expected to announce a $500 million investment in five Michigan plants, according to published reports, even as the company struggles with ongoing losses and moves ahead with plant closing plans.
Reports said GM will add several hundred jobs at the plants as part of the planned investment. In November, GM announced it planned to close 12 plants and facilities and trim 30,000 hourly jobs in North America as it cut capacity in an effort to stem ongoing automotive losses. Several of the locations being hit by closure plans are in Michigan.
GM lost $8.6 billion in 2005 and in January it announced it was cutting the company dividend 50 percent, as well as cutting pay for officers and board members and trimming medical and retirement benefits for salaried retirees.
GM said it will make an announcement about five Michigan plants at 2 p.m. ET at its Pontiac Centerpoint Campus in Pontiac, Mich., at an event to be attended by Gov. Jennifer Granholm and a number of county and local elected officials.
The Detroit News and Detroit Free Press both report the announcement will target the investment to GM's Pontiac Assembly Center and Pontiac stamping plants, an engine plant in Romulus, a transmission plant in Ypsilanti and the ultra-modern Lansing Grand River assembly plant.
The Lansing Grand River assembles the Cadillac CTS sedan and STS, which have been a success story for GM, posting solid sales gains at a time its overall U.S. sales fell 4.3 percent. It has about 1,800 employees and opened in 2001.
The News reports the investment will result in 200 jobs, while the Free Press said it will result in nearly 300.
The announcement is an important piece of good news for the Michigan economy, which in addition to the GM plant closings is also facing a plant closing in Wixom, Mich., by Ford Motor Co. (Research) as that company has announced its own plans to close 14 plants across North America and cut 30,000 jobs.
The state has also been battered by the bankruptcy and a management demand for sharp pay and benefit cuts at the nation's largest auto parts maker, Troy, Mich.-based Delphi. Numerous smaller auto parts makers are also in bankruptcy or in financial trouble as the financial woes of the auto manufacturers hit their sales.
Michigan lost about 20,500 manufacturing jobs in 2005, according to Department of Labor figures, or about 3 percent of that job base, during a time when manufacturing jobs nationwide declined less than 1 percent. The state was responsible for about one in four lost manufacturing jobs nationwide during the year.
02-14-2006, 10:44 AM
#326
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Originally Posted by TSX69
Reports said GM will add several hundred jobs at the plants as part of the planned investment.
Why not put the “job bank” people to work instead of hiring more?
Oops, that’s right. The unions don’t want that.
02-14-2006, 11:03 AM
#327
Originally Posted by Shawn S
Sounds like they’re arranging the deck chairs on the Titanic.
Why not put the “job bank” people to work instead of hiring more?
Oops, that’s right. The unions don’t want that.
Why not put the “job bank” people to work instead of hiring more?
Oops, that’s right. The unions don’t want that.
I really have to wonder if the unions understand that if they ruin the companies they are in, they will lose their union employees to unemployment. Those job banks are the absolute stupidest thing I have ever heard of in the movie industry. Somebody needs to beat some sense into these people before they ruin the lives of hundreds of thousands of people.
02-14-2006, 11:28 AM
#328
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Originally Posted by CGTSX2004
I really have to wonder if the unions understand that if they ruin the companies they are in, they will lose their union employees to unemployment. Those job banks are the absolute stupidest thing I have ever heard of in the movie industry. Somebody needs to beat some sense into these people before they ruin the lives of hundreds of thousands of people.
02-14-2006, 12:51 PM
#329
Not Asian
Originally Posted by Shawn S
Sounds like they’re arranging the deck chairs on the Titanic.
Why not put the “job bank” people to work instead of hiring more?
Oops, that’s right. The unions don’t want that.
Why not put the “job bank” people to work instead of hiring more?
Oops, that’s right. The unions don’t want that.
200 jobs!
02-14-2006, 04:02 PM
#332
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GM to Invest $545M in 5 Michigan Plants - - By Dee-Ann Durbin, AP Auto Writer - - Source: biz.yahoo.com
PONTIAC, Mich. (AP) -- General Motors Corp. said Tuesday that it will hire nearly 300 workers and invest $545 million in five Michigan plants, which is good news for the automaker's home state, but still only a fraction of the 30,000 jobs GM is shedding nationally by 2008 in a broad restructuring.
GM's home state has lost an estimated 130,000 auto manufacturing jobs in the last five years. As a whole, the company has let go more than 27,000 workers since 2000 as it faced mounting competition and rising costs for health care and pensions.
A big chunk of the investment -- $163 million -- will go to GM's Pontiac Assembly Center, which makes the Chevrolet Silverado and GMC Sierra pickups, GM spokesman Dan Flores said. Production of the next generation of those pickups is scheduled to begin later this year.
GM plans to hire 280 people at the Pontiac plant, all workers who are currently employed at GM plants or have been laid off from their jobs. GM has several thousand laid-off workers in a jobs bank. They get most of their pay and benefits even when they're not working.
The company also disclosed three improvement projects that have already been started but weren't announced earlier.
The company is investing $152 million in its Ypsilanti transmission plant to increase production capacity for its rear-wheel-drive, six-speed transmissions, Flores said. It is investing $60 million in its Romulus engine plant for making the small-block V8 engines that will go into its new full-size trucks. It is also spending $32 million to update the hydroforming equipment in its Pontiac metal stamping plant, which uses water to help make the unique curves on the Pontiac Solstice and Saturn Sky roadsters.
GM said it is investing $138 million to expand the body shop in its Lansing Grand River assembly plant, a state-of-the-art facility that will make the new Cadillac CTS. The sedan will go into production late this year or early next year.
Joe Spielman, vice president and general manager of GM's North American manufacturing operations, said the investments demonstrate GM's commitment to Michigan and to improving its products.
"It's good for our people. It shows we're investing in our future," Spielman said.
Erich Merkle, an analyst with the Grand Rapids-based consulting firm IRN Inc., said GM was simply putting a positive spin on investments that had to be made anyway because there are some significant changes to the vehicle models.
"It's a little bit of puffery, to offset the bad news that's been out there the last three or four months," Merkle said. "In automotive terms, it's pocket change. It's really not that much money in the scheme of things."
For instance, GM announced earlier this month that it would spend $118 million to upgrade a Baltimore-area plant to manufacture transmissions for hybrid models.
Spielman said GM wants to be more proactive about publicizing investments it makes in plants and products.
"Rest assured, we are working hard to return this company to profitability and long-term sustainable growth," he said.
GM lost $8.6 billion last year as it struggled with falling U.S. sales and increased costs for health care and materials. But the company has said it won't sacrifice product development, and its global capital spending was up $1 billion to $8 billion in 2005.
It has targeted 12 facilities for closure by 2008, including four locations in Michigan that employ 4,751 hourly and salaried workers. The closures must still be negotiated with the United Auto Workers union, whose contract with GM expires in 2007.
GM and the UAW also are in talks now with auto supplier Delphi Corp., which has threatened to ask a bankruptcy court judge to void its union contracts by this Friday if it doesn't reach an agreement to lower its labor costs. Delphi is GM's former parts division and the automaker's largest supplier.
Flores said GM's announcement Tuesday wasn't related to the Delphi talks.
"This has nothing to do with any potential Delphi, GM and UAW agreement," Flores said.
GM shares closed up 17 cents to $21.92 on the New York Stock Exchange Tuesday.
GM's home state has lost an estimated 130,000 auto manufacturing jobs in the last five years. As a whole, the company has let go more than 27,000 workers since 2000 as it faced mounting competition and rising costs for health care and pensions.
A big chunk of the investment -- $163 million -- will go to GM's Pontiac Assembly Center, which makes the Chevrolet Silverado and GMC Sierra pickups, GM spokesman Dan Flores said. Production of the next generation of those pickups is scheduled to begin later this year.
GM plans to hire 280 people at the Pontiac plant, all workers who are currently employed at GM plants or have been laid off from their jobs. GM has several thousand laid-off workers in a jobs bank. They get most of their pay and benefits even when they're not working.
The company also disclosed three improvement projects that have already been started but weren't announced earlier.
The company is investing $152 million in its Ypsilanti transmission plant to increase production capacity for its rear-wheel-drive, six-speed transmissions, Flores said. It is investing $60 million in its Romulus engine plant for making the small-block V8 engines that will go into its new full-size trucks. It is also spending $32 million to update the hydroforming equipment in its Pontiac metal stamping plant, which uses water to help make the unique curves on the Pontiac Solstice and Saturn Sky roadsters.
GM said it is investing $138 million to expand the body shop in its Lansing Grand River assembly plant, a state-of-the-art facility that will make the new Cadillac CTS. The sedan will go into production late this year or early next year.
Joe Spielman, vice president and general manager of GM's North American manufacturing operations, said the investments demonstrate GM's commitment to Michigan and to improving its products.
"It's good for our people. It shows we're investing in our future," Spielman said.
Erich Merkle, an analyst with the Grand Rapids-based consulting firm IRN Inc., said GM was simply putting a positive spin on investments that had to be made anyway because there are some significant changes to the vehicle models.
"It's a little bit of puffery, to offset the bad news that's been out there the last three or four months," Merkle said. "In automotive terms, it's pocket change. It's really not that much money in the scheme of things."
For instance, GM announced earlier this month that it would spend $118 million to upgrade a Baltimore-area plant to manufacture transmissions for hybrid models.
Spielman said GM wants to be more proactive about publicizing investments it makes in plants and products.
"Rest assured, we are working hard to return this company to profitability and long-term sustainable growth," he said.
GM lost $8.6 billion last year as it struggled with falling U.S. sales and increased costs for health care and materials. But the company has said it won't sacrifice product development, and its global capital spending was up $1 billion to $8 billion in 2005.
It has targeted 12 facilities for closure by 2008, including four locations in Michigan that employ 4,751 hourly and salaried workers. The closures must still be negotiated with the United Auto Workers union, whose contract with GM expires in 2007.
GM and the UAW also are in talks now with auto supplier Delphi Corp., which has threatened to ask a bankruptcy court judge to void its union contracts by this Friday if it doesn't reach an agreement to lower its labor costs. Delphi is GM's former parts division and the automaker's largest supplier.
Flores said GM's announcement Tuesday wasn't related to the Delphi talks.
"This has nothing to do with any potential Delphi, GM and UAW agreement," Flores said.
GM shares closed up 17 cents to $21.92 on the New York Stock Exchange Tuesday.
02-14-2006, 04:03 PM
#333
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I like this part the best
The company is investing $152 million in its Ypsilanti transmission plant to increase production capacity for its rear-wheel-drive, six-speed transmissions, Flores said. It is investing $60 million in its Romulus engine plant for making the small-block V8 engines that will go into its new full-size trucks. It is also spending $32 million to update the hydroforming equipment in its Pontiac metal stamping plant, which uses water to help make the unique curves on the Pontiac Solstice and Saturn Sky roadsters.
GM said it is investing $138 million to expand the body shop in its Lansing Grand River assembly plant, a state-of-the-art facility that will make the new Cadillac CTS. The sedan will go into production late this year or early next year.
GM said it is investing $138 million to expand the body shop in its Lansing Grand River assembly plant, a state-of-the-art facility that will make the new Cadillac CTS. The sedan will go into production late this year or early next year.
02-14-2006, 04:17 PM
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Will GM survive, or run out of cash?
Jerry Flint:
http://www.forbes.com/columnists/col...0214flint.html
Jerry Flint:
http://www.forbes.com/columnists/col...0214flint.html
The U.S. auto industry has been much in the news lately, but the focus has been on layoffs, plant closings and financial woes. Yet it is wrong to paint the domestic manufacturers with the same brush.
Let's start with American Chrysler. Yes, it's owned by German DaimlerChrysler (nyse: DCX - news - people ), but it's still Detroit.
The way that I see it, Chrysler is a lean, mean fighting machine that is profitable and fairing better than the Mercedes-Benz unit. Chrysler is even picking up a bit of market share. Even so, Toyota Motor (nyse: TM - news - people ) is growing faster and could outsell Chrysler this year. Another challenge: Seventy percent of Chrysler's sales come from trucks, and trucks sales are slowing. To keep rolling, Chrysler must keep its truck business reasonably strong and shine with Jeeps and new cars.
For example, sales of the big Dodge Ram pickup have been sliding since hitting 449,000 in 2003. In 2007, Ram will be under fierce pressure from new big pickups made by General Motors (nyse: GM - news - people ) and Toyota.
In minivans, Chrysler is the leader and holds its own, even against the aggressive Asians. Chrysler might even grow a bit in this segment, as GM and Ford Motor (nyse: F - news - people ) seem close to giving up on minivans.
Jeep looks like a winner. The new full-size, $28,135 Commander and two more car-like Jeeps coming this year should add plenty of volume. A re-engineered version of the iconic Jeep Wrangler, including a first-ever four-door model, comes to market later this year, too.
A new small vehicle replacing the Neon is coming out now, the Dodge Caliber. Over the next year, there should be replacements for Chrysler's midsized cars, the Chrysler Sebring and Dodge Stratus. The current Chrysler entries in this segment are not competitive, so almost anything the company brings to market here has to be an improvement.
If Chrysler can sell enough of these new models to put its two U.S. car plants on three shifts, the profit will keep pouring in. Getting an extra-base hit every time at bat is not easy, but at least Chrysler is on a winning streak.
One problem: Unions in the U.S. and Canada may want to punish Chrysler for its success, holding back on concessions they make to Ford and GM. But Chrysler isn't hampered as much by legacy costs--a huge numbers of retirees and ex-employees on the company dole--as GM and Ford.
Manager Casey Stengel's comment about the blundering 1962 New York Mets, “Can't anybody here play this game,” also applies to Ford Motor.
Personally, I think that Ford should be a piece of cake to fix. Some of its products, such as the F-150 pickup and Mustang are a success. The company still is profitable worldwide but runs huge losses in the U.S. Ford has only three domestic car lines here and just two dealer groups, an advantage over nameplate-encumbered GM. The trouble is that no one at Ford seems to understand the automobile business. Ford management, if you care to call it that, has been in chaos. The company has had too much turnover of top executives. Ditto for its vehicle models.
William Clay Ford Jr., the chairman, saved Ford when he threw out Jacques Nasser in 2001. The problem is that he's been unable to find a bright, powerful, charismatic general, like a Lee Iacocca, to lead them out of the wilderness. Ford's latest hope is Mark Fields, who did a good job turning around Ford's 37%-owned Mazda unit.
But there's no sign of wisdom yet. For example, Ford just announced they are changing the name of the new Lincoln Zephyr sedan, which just came out last fall, blowing the entire momentum of the introduction year. The Zephyr's new name: MKZ. At Dearborn, there seems to be no realization that the world is switching back to rear-wheel drive for luxury and performance models. Ford seems to be going in the opposite direction of the trend. They also talk of building a new plant for a new small car, which would cost a fortune, but ignore their at-one-time hugely profitable rear-drive platform.
"My name is Ozymandias, king of kings: Look on my works, ye Mighty, and despair!"
The above quote from Percy Bysshe Shelley's famous poem surely applies to General Motors. The company's product program is moving far faster than Ford's. GM's new vehicles are better, much better than the models that they replace. Chevrolet is the No. 1 seller again. Pontiac will improve this year. Saturn will be back next year. GM's new big sport utilities are just arriving, and next fall there will be new pickups. The Chevrolet Camaro concept car was the hit of the Detroit auto show and car nuts everywhere. Thanks to Robert Lutz, the product chief, GM interiors are getting to be what they should be. GM hasn't solved all its problems, but it is making significant gains.
Alas, all this work could be overwhelmed.
The talk of bankruptcy (which is not happening) is hurting GM. Who wants to buy a car from a company they whisper about? The history of rebates and giveaways haunt GM as customers wait for the deal and not the product. Those legacy costs and the GM dole, called the Jobs Bank for laid-off GM workers, drain billions from the company. Meanwhile, union officials, just like politicians, are possibly more worried about their jobs than GM's survival. Therefore, they say, “No more concessions.”
The question is whether GM's sales nosedive will level off before the money runs out. It's possible. We have seen Nissan (nasdaq: NSANY - news - people ) turned around. Ditto for Chrysler. But GM's present management hasn't been able to completely turn the corner, and it is running out of time.
What is likely to evolve over time is a U.S. industry that looks more like Europe, which is five or six big companies rather than a big three, with GM, Toyota, Ford, Chrysler, Honda Motor (nyse: HMC - news - people ) and Nissan each holding as much as 18% to as little as 7% of the U.S. market. For that to happen, first GM and Ford must survive the cost of getting smaller.
Let's start with American Chrysler. Yes, it's owned by German DaimlerChrysler (nyse: DCX - news - people ), but it's still Detroit.
The way that I see it, Chrysler is a lean, mean fighting machine that is profitable and fairing better than the Mercedes-Benz unit. Chrysler is even picking up a bit of market share. Even so, Toyota Motor (nyse: TM - news - people ) is growing faster and could outsell Chrysler this year. Another challenge: Seventy percent of Chrysler's sales come from trucks, and trucks sales are slowing. To keep rolling, Chrysler must keep its truck business reasonably strong and shine with Jeeps and new cars.
For example, sales of the big Dodge Ram pickup have been sliding since hitting 449,000 in 2003. In 2007, Ram will be under fierce pressure from new big pickups made by General Motors (nyse: GM - news - people ) and Toyota.
In minivans, Chrysler is the leader and holds its own, even against the aggressive Asians. Chrysler might even grow a bit in this segment, as GM and Ford Motor (nyse: F - news - people ) seem close to giving up on minivans.
Jeep looks like a winner. The new full-size, $28,135 Commander and two more car-like Jeeps coming this year should add plenty of volume. A re-engineered version of the iconic Jeep Wrangler, including a first-ever four-door model, comes to market later this year, too.
A new small vehicle replacing the Neon is coming out now, the Dodge Caliber. Over the next year, there should be replacements for Chrysler's midsized cars, the Chrysler Sebring and Dodge Stratus. The current Chrysler entries in this segment are not competitive, so almost anything the company brings to market here has to be an improvement.
If Chrysler can sell enough of these new models to put its two U.S. car plants on three shifts, the profit will keep pouring in. Getting an extra-base hit every time at bat is not easy, but at least Chrysler is on a winning streak.
One problem: Unions in the U.S. and Canada may want to punish Chrysler for its success, holding back on concessions they make to Ford and GM. But Chrysler isn't hampered as much by legacy costs--a huge numbers of retirees and ex-employees on the company dole--as GM and Ford.
Manager Casey Stengel's comment about the blundering 1962 New York Mets, “Can't anybody here play this game,” also applies to Ford Motor.
Personally, I think that Ford should be a piece of cake to fix. Some of its products, such as the F-150 pickup and Mustang are a success. The company still is profitable worldwide but runs huge losses in the U.S. Ford has only three domestic car lines here and just two dealer groups, an advantage over nameplate-encumbered GM. The trouble is that no one at Ford seems to understand the automobile business. Ford management, if you care to call it that, has been in chaos. The company has had too much turnover of top executives. Ditto for its vehicle models.
William Clay Ford Jr., the chairman, saved Ford when he threw out Jacques Nasser in 2001. The problem is that he's been unable to find a bright, powerful, charismatic general, like a Lee Iacocca, to lead them out of the wilderness. Ford's latest hope is Mark Fields, who did a good job turning around Ford's 37%-owned Mazda unit.
But there's no sign of wisdom yet. For example, Ford just announced they are changing the name of the new Lincoln Zephyr sedan, which just came out last fall, blowing the entire momentum of the introduction year. The Zephyr's new name: MKZ. At Dearborn, there seems to be no realization that the world is switching back to rear-wheel drive for luxury and performance models. Ford seems to be going in the opposite direction of the trend. They also talk of building a new plant for a new small car, which would cost a fortune, but ignore their at-one-time hugely profitable rear-drive platform.
"My name is Ozymandias, king of kings: Look on my works, ye Mighty, and despair!"
The above quote from Percy Bysshe Shelley's famous poem surely applies to General Motors. The company's product program is moving far faster than Ford's. GM's new vehicles are better, much better than the models that they replace. Chevrolet is the No. 1 seller again. Pontiac will improve this year. Saturn will be back next year. GM's new big sport utilities are just arriving, and next fall there will be new pickups. The Chevrolet Camaro concept car was the hit of the Detroit auto show and car nuts everywhere. Thanks to Robert Lutz, the product chief, GM interiors are getting to be what they should be. GM hasn't solved all its problems, but it is making significant gains.
Alas, all this work could be overwhelmed.
The talk of bankruptcy (which is not happening) is hurting GM. Who wants to buy a car from a company they whisper about? The history of rebates and giveaways haunt GM as customers wait for the deal and not the product. Those legacy costs and the GM dole, called the Jobs Bank for laid-off GM workers, drain billions from the company. Meanwhile, union officials, just like politicians, are possibly more worried about their jobs than GM's survival. Therefore, they say, “No more concessions.”
The question is whether GM's sales nosedive will level off before the money runs out. It's possible. We have seen Nissan (nasdaq: NSANY - news - people ) turned around. Ditto for Chrysler. But GM's present management hasn't been able to completely turn the corner, and it is running out of time.
What is likely to evolve over time is a U.S. industry that looks more like Europe, which is five or six big companies rather than a big three, with GM, Toyota, Ford, Chrysler, Honda Motor (nyse: HMC - news - people ) and Nissan each holding as much as 18% to as little as 7% of the U.S. market. For that to happen, first GM and Ford must survive the cost of getting smaller.
02-27-2006, 10:18 AM
#335
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GM to offer more incentives in March
GM to offer more incentives in March - - Source: Autonews.com
DETROIT -- General Motors has told its dealers it will launch a nationwide discount promotion in March, steering away from its goal of not providing big incentives, a newspaper said on Monday.
The Detroit News said the "March Madness" event, tied to the NCAA basketball tournament, will run from March 15 to April 4, and will be similar to a promotion GM ran last March that included lower sticker prices on select models across GM's eight brands.
Last year's program also included cash bonuses of $500 to $,1500 on models that had been on dealer lots for more than 125 days.
GM officials could not be reached immediately for comment.
In a separate program, GM is offering between $150 and $700 in cash incentives to dealers who accept extra vehicles in the last week of February, the paper said.
The programs come after the world's largest automaker in January announced efforts to move away from incentives by cutting prices on most of its vehicles to reflect the price consumers actually pay.
GM has been losing U.S. market share to foreign rivals as it struggles with high labor costs and declining sales. Automakers are expected to announce February sales on Wednesday.
The Detroit News said the "March Madness" event, tied to the NCAA basketball tournament, will run from March 15 to April 4, and will be similar to a promotion GM ran last March that included lower sticker prices on select models across GM's eight brands.
Last year's program also included cash bonuses of $500 to $,1500 on models that had been on dealer lots for more than 125 days.
GM officials could not be reached immediately for comment.
In a separate program, GM is offering between $150 and $700 in cash incentives to dealers who accept extra vehicles in the last week of February, the paper said.
The programs come after the world's largest automaker in January announced efforts to move away from incentives by cutting prices on most of its vehicles to reflect the price consumers actually pay.
GM has been losing U.S. market share to foreign rivals as it struggles with high labor costs and declining sales. Automakers are expected to announce February sales on Wednesday.
02-27-2006, 02:33 PM
#342
Senior Moderator
Originally Posted by charliemike
Well it's not a big deal ... 125 days is about 4 months. Worth clearing inventory.
Thats not the point. It seems like just yesterday GM swore off incentives and instead decided to lower prices across the line because they realized incentives were hurting if not killing the brand.
02-27-2006, 02:42 PM
#343
The sizzle in the Steak
GM has yet to figure out how to fix itself correctly.
02-27-2006, 03:13 PM
#344
Senior Moderator
Originally Posted by Moog-Type-S
GM has yet to figure out how to fix itself correctly.
One of these days, they'll figure it out, or go bankrupt...
02-27-2006, 03:13 PM
#345
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What's the big deal? GM is trying to push vehicles that aren't selling. Hence the incentive applies to cars on dealer lots more than 125 days. Did you guys read the article?
02-27-2006, 03:15 PM
#346
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Originally Posted by GreenMonster
But everyone outside of GM seems to know that the answer is to start putting out vehicles that people want instead of relieing on the profits from SUV's....
One of these days, they'll figure it out, or go bankrupt...
One of these days, they'll figure it out, or go bankrupt...
02-27-2006, 03:23 PM
#347
Senior Moderator
Originally Posted by Maximized
Did you guys read the article?
The Detroit News said the "March Madness" event, tied to the NCAA basketball tournament, will run from March 15 to April 4, and will be similar to a promotion GM ran last March that included lower sticker prices on select models across GM's eight brands.
Last year's program also included cash bonuses of $500 to $,1500 on models that had been on dealer lots for more than 125 days.
Last year's program also included cash bonuses of $500 to $,1500 on models that had been on dealer lots for more than 125 days.
02-27-2006, 03:24 PM
#348
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Originally Posted by dom
Where does it say that this new incentive program is ONLY for cars on lots for 125 days? It says LAST YEARS program INCLUDED those cars, doesn't say it was only those cars nor does it say anything about what cars this new progarm will include exactly.
02-27-2006, 03:35 PM
#349
Senior Moderator
Originally Posted by Maximized
Key word being SIMILAR.
Sure but last years program also included cars outside of the 125 day limit. The 125 day limit was only a PART of the program.
02-27-2006, 04:28 PM
#350
Senior Moderator
I been learning a lot lately about Detroit and it actually makes me upset that they are having this much trouble.
Makes me want to jump into CTS-V to help everyone.
Makes me want to jump into CTS-V to help everyone.
02-27-2006, 04:34 PM
#351
I feel the need...
Originally Posted by Crazy Sellout
I been learning a lot lately about Detroit and it actually makes me upset that they are having this much trouble.
Makes me want to jump into CTS-V to help everyone.
Makes me want to jump into CTS-V to help everyone.
I've had conflicting emotions on this issue too, but then I come to my senses...
GM Management Gets Lion's Share of Blame, Not UAW: Doron Levin
2006-02-15 00:09 (New York)
(Commentary. Doron Levin is a Bloomberg News columnist.
The opinions expressed are his own.)
By Doron Levin
Feb. 15 (Bloomberg) -- Last week I wrote a column
criticizing the inflexibility of the United Auto Workers union,
and especially its president, Ron Gettelfinger, for foot-
dragging in response to the well-documented need to restructure
the Detroit-based automakers.
I heard from lots of readers, many of whom agreed, as well
as union members who challenged my assertion that the UAW bears
a big chunk of responsibility for the financial and operating
travails of General Motors Corp. and other troubled companies.
A few complained that my column didn't criticize GM's
management. It's a fair point that merits a response, one that
can be applied to other U.S. automakers as well.
Managers and executives from GM, Ford Motor Co. and the old
Chrysler Corp. have been two-faced with respect to the UAW.
Every three or four years for decades they renewed labor
contracts, which they hailed publicly. Privately, they bemoaned
the agreements as ruinously expensive and restrictive.
The collective excuse for this charade: ``We can't control
UAW wages and work rules, because we can't afford to take a
strike.''
Automakers dug in their heels now and then, prompting some
painful work stoppages before backing down. My favorite example
is the time in the late 1980s when Chrysler lost a quarter of a
billion from a strike called by the UAW to force the company to
hire 12 janitors at a Twinsburg, Ohio, plant.
Perq Inflation
No, the auto industry's white-collar bosses decided they
would never be able to change the adversarial relationship with
the UAW. So they took the occasional strike and evened the
score, or so they thought, by compensating themselves
generously, larding the bureaucracy with too many subordinates,
and creating a class system of titles, benefits and perks,
complete with jets, drivers and dining rooms.
What this profligacy cost in monetary terms will never be
known; the size of the lost opportunity has been immense. While
Toyota Motor Corp. was demonstrating how to squeeze every drop
of waste from operations and recycle cash for the customer's
benefit, GM at times seemed to be lighting its cigars with $100
bills.
The popular and economical 1982 Honda Accord and 1984
Toyota Camry were direct challenges to Detroit's family sedans
and should have been a clarion call to top executives. And if
not the Camry and Accord, then certainly the 1990 Lexus LS 400
demonstrated that America's love affair with Cadillac was
threatened. Instead, GM, Ford and Chrysler executives argued
that they were losing customers because consumer perceptions
chronically ``lagged'' the reality that they had responded and
their models were improving.
Baffled
Every automaker has duds, like GM's Pontiac Aztek. But how
to explain GM's puzzling failure to create a strong entry in the
U.S. minivan market? Or Ford's confused and dilatory approach to
luxury cars, resulting in the decline of the once-proud Lincoln
brand? Clearly, the UAW shouldn't take the rap for vehicles that
don't sell.
Motor City leaders are prone to blame unfair trade
practices for their troubles, not to mention currency
manipulations by the Bank of Japan, misguided federal
regulation, the UAW, the need for tort reform -- everything
except the root cause: executive dereliction of duty to manage
the auto companies for the long-term benefit of the customers,
shareholders, workers and the U.S. economy.
With few exceptions Detroit's leaders have been finance
whizzes and company lifers, trained to prettify bad results and
reject wisdom from outsiders.
Falling Short
Under generally accepted accounting principles the cost of
retiree health-care benefits granted years ago were carried on
the books for a long time with little impact on profit. Only
recently have these time-bombs begun to detonate, as costs rise
and stricter accounting rules dictate their recognition.
To the extent management has fallen short, GM's board also
has failed to hold management accountable. The slide has been
documented month-by-month, quarter-by-quarter; yet directors
over the years have been content to watch their charges make
marginal improvements rather than substantive fixes. No wonder
GM shares recently touched a price they hadn't seen since 1982.
Rick Wagoner, chief executive officer, is a finance man and
heir to GM's analytic, centralized, financial approach to
automaking. He inherited some of GM's troubles from the last
four or five GM CEOs, all of whom must have known they would be
safely in retirement (or in the ground) when GM finally ran out
of money or when its market-share fell to a critical level.
GM's proud, inward-looking, inbred culture is the big
reason why the automaker's management couldn't see how
thoroughly the Toyota production system was changing the
industry. Culture is a reason, not an excuse.
As any UAW leader could rightly say: That's why those auto
executives make the big bucks. They just didn't get the job done
when it comes to spotting important trends and crafting a
response.
source: bloomberg
02-27-2006, 04:53 PM
#352
The sizzle in the Steak
Cut Hummer & Saab loose for starters.
02-27-2006, 05:06 PM
#353
I feel the need...
Originally Posted by Moog-Type-S
Cut Hummer & Saab loose for starters.
02-27-2006, 07:23 PM
#354
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Originally Posted by PistonFan
I agree, Jerry York is right on the money. There's a stand alone Hummer dealership I drive by quite frequently -- swear there must be over 400 H2's and H3's just begging for a home parked in the lot.
Divest from Jaguar, Aston Martin, Volvo, SAAB, etc and spend some money on Pontiac, Buick, Lincoln, Mercury, and win!
02-27-2006, 07:48 PM
#355
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Originally Posted by Moog-Type-S
Cut Hummer & Saab loose for starters.
02-28-2006, 10:24 AM
#356
The sizzle in the Steak
Originally Posted by titan
Naww... think beyond the NA market. Saab needs work everywhere, true. Hummer is actually having a major expansion in Africa and Asia, where they're challenging Land Rover's turf for lux SUVs. They need to keep that brand, for sure. They won't let Saab go, becasue 1.) it'll be admitting defeat, and 2.) if someone else pics it up (Toyota especially), it may become a money maker.
05-25-2006, 08:01 PM
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More than 20,000 GM workers accept buyouts - - Source: Autonews.com
DETROIT -- More than 20,000 blue-collar workers at General Motors have accepted buyout offers, surpassing the automaker's internal target with a month to go before the deadline, the Detroit News reported on Thursday, citing people familiar with the situation.
GM spokeswoman Katie McBride, while declining to comment on specific buyout numbers, said: "We are pleased with the acceptance rate so far."
The automaker, which made the offers to all 113,000 of its U.S. hourly workers, had expected 20,000 employees to come forward by the June 23 deadline, the sources told the newspaper.
GM will continue to offer buyouts to workers who sign up by the deadline as the the automaker plans to take as many buyouts as it can get, the sources said.
GM shares rose more than 7 percent and its bond price got a slight lift on Wednesday after Merrill Lynch analyst John Murphy raised its rating on the automaker on signs that its cost-cutting program was moving faster than expected.
Murphy said there appeared to be significant interest in GM's buyout programs for its hourly workers represented by the United Auto Workers union, indicating progress in cutting GM's high labor costs.
McBride said GM was hiring temporary workers at some North American plants, partly to replace workers who have already left the company after accepting the buyouts.
GM also typically hires temporary workers in the summer to fill in for employees who are on vacation.
McBride said "a limited number" of employees have already left the company. She declined to be specific, but said the numbers have "exceeded our expectations."
Many of the temporary workers the automaker is hiring will eventually be replaced by GM workers from closed plants and Delphi Corp. workers who are returning to the automaker as part of an earlier agreement with the parts maker and its union, McBride said.
GM is in the midst of a comprehensive restructuring, which includes closing a dozen plants and laying off 30,000 workers, to return its auto operations to profit.
GM spokeswoman Katie McBride, while declining to comment on specific buyout numbers, said: "We are pleased with the acceptance rate so far."
The automaker, which made the offers to all 113,000 of its U.S. hourly workers, had expected 20,000 employees to come forward by the June 23 deadline, the sources told the newspaper.
GM will continue to offer buyouts to workers who sign up by the deadline as the the automaker plans to take as many buyouts as it can get, the sources said.
GM shares rose more than 7 percent and its bond price got a slight lift on Wednesday after Merrill Lynch analyst John Murphy raised its rating on the automaker on signs that its cost-cutting program was moving faster than expected.
Murphy said there appeared to be significant interest in GM's buyout programs for its hourly workers represented by the United Auto Workers union, indicating progress in cutting GM's high labor costs.
McBride said GM was hiring temporary workers at some North American plants, partly to replace workers who have already left the company after accepting the buyouts.
GM also typically hires temporary workers in the summer to fill in for employees who are on vacation.
McBride said "a limited number" of employees have already left the company. She declined to be specific, but said the numbers have "exceeded our expectations."
Many of the temporary workers the automaker is hiring will eventually be replaced by GM workers from closed plants and Delphi Corp. workers who are returning to the automaker as part of an earlier agreement with the parts maker and its union, McBride said.
GM is in the midst of a comprehensive restructuring, which includes closing a dozen plants and laying off 30,000 workers, to return its auto operations to profit.
05-25-2006, 08:33 PM
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uh...so they brag about employing more american workers than the foreign makers.
but last time i looked, foreign makers are hiring for factories in the U.S. while domestics are laying them off or buying them out.
I see a potential commercial in this for the big-jap-3.
but last time i looked, foreign makers are hiring for factories in the U.S. while domestics are laying them off or buying them out.
I see a potential commercial in this for the big-jap-3.
06-01-2006, 08:19 AM
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GM Takes flack for cheap gas incentive
GM takes flack for cheap gas incentive
Critics say incentive keeps buyers hooked on gas hogs; automaker calls attacks wrongheaded and unfair.
David Shepardson / Detroit News Washington Bureau
WASHINGTON -- General Motors Corp.'s offer to defray the costs of gas for some buyers of new SUVs and sedans is drawing heavy fire from environmentalists and influential pundits.
Under the automaker's "fuel price protection program," GM is reimbursing buyers in Florida and California for gas costs above $1.99 a gallon for one year.
The program, which runs through July 5, includes gas-thirsty SUVs such as the Chevy Tahoe and Suburban, GMC Yukon, Hummer H2 and H3, and Cadillac SRX.
While GM has stepped up its promotion of alternative fuels, critics say the new gas program is a cynical attempt to keep selling gas hogs without regard to the environment and America's dependence on foreign oils.
"It says a lot about GM and their dire financial straits that they are so desperate to sell the gas guzzlers that no one wants, that they are paying for the gas to drive them home," said Dan Becker, director of the Sierra Club's Global Warming Program. "When did you ever hear about a junkie giving up his subsidized fix?"
Influential New York Times columnist Tom Friedman -- author of the best-selling book "The World is Flat" -- took on GM in a sharply worded column Wednesday.
"Is there a company more dangerous to America's future than General Motors? Surely, the sooner this company gets taken over by Toyota, the better this country will be," Friedman wrote, comparing GM to "a crack dealer looking to keep his addicts on a tight leash" by offering the fuel program.
GM Vice Chairman Bob Lutz, who oversees the automaker's product development, said in an e-mail that Friedman "is so 'over the top' that it borders on psychosis."
Lutz said his hope "is that the majority of Americans, not being extreme liberals, and harboring a deep-seated distrust toward the media, will see his piece for what it is: the product of an unusual, but not altogether well, mind."
GM spokeswoman Deborah Silverman said the fuel-savings program has been successful, based on reports from dealers. She said there are no plans to expand the incentive program nationally.
Boston Globe columnist Derrick Z. Jackson also criticized the program last week in a column titled "Leveraging lunacy at GM."
"Americans burn up cash in inefficient vehicles. Petroleum companies rake in record profits. The auto industry buys off Congress to kill increases in fuel economy rather than retool," Jackson wrote.
Detroit automakers support "reasonable" increases in fuel economy standards and haven't opposed the Bush adminstration's request to seek authority to increase fuel economy standards for passenger cars, which has remained at 27.5 miles per gallon for two decades.
Environmentalists insist the Bush proposal is a sham and Congress should mandate a specific miles-per-gallon requirement to guarantee fuel savings.
A bill to grant the authority passed a House committee May 11 but stalled before reaching the floor. It could come up this month for a vote.
GM officials defend the company's large SUVs, and point out that the redesigned 2007 Chevy Tahoe is more fuel efficient than a Toyota Sequoia. The automaker has sought to burnish its environmental credentials by increasing its commitment to flex-fuel vehicles, moving to commercialize hydrogen fuel cells, and offering the most U.S. models that average 30 miles per gallon or more.
"To say GM is like a crack dealer trying to get people to buy gas guzzlers is just patently ridiculous," GM spokesman Brian Akre said. "We sell a full range of vehicles, just like Toyota and just like the other large auto companies."
Akre questioned how an incentive -- less than some competitors' programs -- would "addict" customers.
"Let's be honest, a $1,000 gas card is not going to convince someone who was going to buy a $15,000 small car to buy a $35,000 Chevy Tahoe," Akre said.
One environmentalist says GM's latest marketing effort shows it made too large a bet on SUVs, rather than hybrids or more fuel-efficient vehicles.
"It's a gimmick, and if GM would focus more on making fuel-efficient cars and trucks, they wouldn't need such gimmicks," said Eric Haxthausen, an economist at Environmental Defense, a group that has been critical of large SUVs.
David Cole, head of the Center for Automotive Research in Ann Arbor, said GM has to offer incentives to be competitive.
"The liberal philosophy is we ought to not be buying GM SUVs and instead buying Toyota Priuses. That's their perfect world but it's not the world in which we live."
You can reach David Shepardson at (202) 662 - 8735 or dshepardson@detnews.com.
Critics say incentive keeps buyers hooked on gas hogs; automaker calls attacks wrongheaded and unfair.
David Shepardson / Detroit News Washington Bureau
WASHINGTON -- General Motors Corp.'s offer to defray the costs of gas for some buyers of new SUVs and sedans is drawing heavy fire from environmentalists and influential pundits.
Under the automaker's "fuel price protection program," GM is reimbursing buyers in Florida and California for gas costs above $1.99 a gallon for one year.
The program, which runs through July 5, includes gas-thirsty SUVs such as the Chevy Tahoe and Suburban, GMC Yukon, Hummer H2 and H3, and Cadillac SRX.
While GM has stepped up its promotion of alternative fuels, critics say the new gas program is a cynical attempt to keep selling gas hogs without regard to the environment and America's dependence on foreign oils.
"It says a lot about GM and their dire financial straits that they are so desperate to sell the gas guzzlers that no one wants, that they are paying for the gas to drive them home," said Dan Becker, director of the Sierra Club's Global Warming Program. "When did you ever hear about a junkie giving up his subsidized fix?"
Influential New York Times columnist Tom Friedman -- author of the best-selling book "The World is Flat" -- took on GM in a sharply worded column Wednesday.
"Is there a company more dangerous to America's future than General Motors? Surely, the sooner this company gets taken over by Toyota, the better this country will be," Friedman wrote, comparing GM to "a crack dealer looking to keep his addicts on a tight leash" by offering the fuel program.
GM Vice Chairman Bob Lutz, who oversees the automaker's product development, said in an e-mail that Friedman "is so 'over the top' that it borders on psychosis."
Lutz said his hope "is that the majority of Americans, not being extreme liberals, and harboring a deep-seated distrust toward the media, will see his piece for what it is: the product of an unusual, but not altogether well, mind."
GM spokeswoman Deborah Silverman said the fuel-savings program has been successful, based on reports from dealers. She said there are no plans to expand the incentive program nationally.
Boston Globe columnist Derrick Z. Jackson also criticized the program last week in a column titled "Leveraging lunacy at GM."
"Americans burn up cash in inefficient vehicles. Petroleum companies rake in record profits. The auto industry buys off Congress to kill increases in fuel economy rather than retool," Jackson wrote.
Detroit automakers support "reasonable" increases in fuel economy standards and haven't opposed the Bush adminstration's request to seek authority to increase fuel economy standards for passenger cars, which has remained at 27.5 miles per gallon for two decades.
Environmentalists insist the Bush proposal is a sham and Congress should mandate a specific miles-per-gallon requirement to guarantee fuel savings.
A bill to grant the authority passed a House committee May 11 but stalled before reaching the floor. It could come up this month for a vote.
GM officials defend the company's large SUVs, and point out that the redesigned 2007 Chevy Tahoe is more fuel efficient than a Toyota Sequoia. The automaker has sought to burnish its environmental credentials by increasing its commitment to flex-fuel vehicles, moving to commercialize hydrogen fuel cells, and offering the most U.S. models that average 30 miles per gallon or more.
"To say GM is like a crack dealer trying to get people to buy gas guzzlers is just patently ridiculous," GM spokesman Brian Akre said. "We sell a full range of vehicles, just like Toyota and just like the other large auto companies."
Akre questioned how an incentive -- less than some competitors' programs -- would "addict" customers.
"Let's be honest, a $1,000 gas card is not going to convince someone who was going to buy a $15,000 small car to buy a $35,000 Chevy Tahoe," Akre said.
One environmentalist says GM's latest marketing effort shows it made too large a bet on SUVs, rather than hybrids or more fuel-efficient vehicles.
"It's a gimmick, and if GM would focus more on making fuel-efficient cars and trucks, they wouldn't need such gimmicks," said Eric Haxthausen, an economist at Environmental Defense, a group that has been critical of large SUVs.
David Cole, head of the Center for Automotive Research in Ann Arbor, said GM has to offer incentives to be competitive.
"The liberal philosophy is we ought to not be buying GM SUVs and instead buying Toyota Priuses. That's their perfect world but it's not the world in which we live."
You can reach David Shepardson at (202) 662 - 8735 or dshepardson@detnews.com.