High gas prices

[JohnDoe]

I would like to add that the GM bailout definitely needs to come with some aggresive changes starting at the top those guys had their chance and have lost 73 billion since 2004 - Rick Wagoner, Mark Lenave, etc, etc.

Can't say that I disagree. If you always do what you've always done, you're always going to get what you always got.

I can't imagine what will happen to the auto industry if the bailout does not occur. The short term would just be a horrific financial nightmare for everyone.

No doubt about it. As a slight tangent, anybody else wondering what the impact of GM going bankrupt would have on the marine industry? GM engines are used in something north of 95% of inboards & I/Os.

Jerry, great contributions to this thread, as usual.

But PLEASE don't get rid of Rick Wagoner. Guy is a real "car guy" and the recent problems are not his fault. The problem was from 1995 to 2005 where GM's products just didn't compete, underperformed, and people changed theor whole perspective on Detroit. Thanks to Rick, GM has some amazing new products: new CTS, lambda platform, solstice, G6, G8, great new truck line, and overall fewer "cookie cutter" cars. A change in reputation will not happen overnight, but he has the right idea, in my humble opinion.

As to marine engines, it would have little effect. The proprietary molds/parts are assets of GM and no matter what happens, that "arm" will be sold and someone will continue to produce them.

[johnsvt]

I would like to add that the GM bailout definitely needs to come with some aggresive changes starting at the top those guys had their chance and have lost 73 billion since 2004 - Rick Wagoner, Mark Lenave, etc, etc.

Can't say that I disagree. If you always do what you've always done, you're always going to get what you always got.

I can't imagine what will happen to the auto industry if the bailout does not occur. The short term would just be a horrific financial nightmare for everyone.

No doubt about it. As a slight tangent, anybody else wondering what the impact of GM going bankrupt would have on the marine industry? GM engines are used in something north of 95% of inboards & I/Os.

Jerry, great contributions to this thread, as usual.

But PLEASE don't get rid of Rick Wagoner. Guy is a real "car guy" and the recent problems are not his fault. The problem was from 1995 to 2005 where GM's products just didn't compete, underperformed, and people changed theor whole perspective on Detroit. Thanks to Rick, GM has some amazing new products: new CTS, lambda platform, solstice, G6, G8, great new truck line, and overall fewer "cookie cutter" cars. A change in reputation will not happen overnight, but he has the right idea, in my humble opinion.

As to marine engines, it would have little effect. The proprietary molds/parts are assets of GM and no matter what happens, that "arm" will be sold and someone will continue to produce them.

While Wagoner may be a car guy. He just hasn't made enough tough decisions to get the ship righted. Solstice, G6, and G8 are attractive cars but very slow selling.

[Guest J-Ro]

I always thought Lutz was the vision behind the new designs.

[JohnDoe]

I always thought Lutz was the vision behind the new designs.

I think he does and should get a lot of the credit too.

johnsvt, I agree their obviously slow selling, but I'm just saying that Waggoner/Lutz (thanks jro) shouldn't be shown the door due to recent sales. Sales are slow due to the reputation GM built for itself the last decade, which isn't solved overnight by making appealing cars. IT will come when people know people who bought a new Malibu and it ran good for 100k, bought a G6 and didn't have every electronic gremlin by 10k, etc....I'm just saying Waggoner has them on the right track in terms of direction.

[SunriseH2OSkier]

I always thought Lutz was the vision behind the new designs.

I think he does and should get a lot of the credit too.

johnsvt, I agree their obviously slow selling, but I'm just saying that Waggoner/Lutz (thanks jro) shouldn't be shown the door due to recent sales. Sales are slow due to the reputation GM built for itself the last decade, which isn't solved overnight by making appealing cars. IT will come when people know people who bought a new Malibu and it ran good for 100k, bought a G6 and didn't have every electronic gremlin by 10k, etc....I'm just saying Waggoner has them on the right track in terms of direction.

All I will say about Lutz is that he has qualities about him that are good, and others that are no so good. The good: The man knows what he wants, and you better not get in the way. He has no patience for red tape. He tells some really funny stories (I sit with the man in a meeting at least once every 3 months). We really needed that fresh perspective here. The not so good: sometimes what he wants is just not the right thing, but won't listen to anybody. Here's an interesting read for you. Prime example of not wanting the right thing is the Solstice/Sky roadsters. They are great little cars. But how many people out there are in the market for a small 2 seater? (Not nearly enough). It costs the same amount of money to develop a brand new 2-seater as it does say a minivan, or dare I say it, a Camaro. If we had done the Camaro instead of the Solstice, it would have been out in time to catch the retro craze. Would have sold a ton more of them than we ever did the Solstice/Sky. But Bob wanted the Solstice, so that's what we did. And as a result, we are still a few months away from introducing a car that will surely get criticized by many as being late to the game, too stuck in the past, and probably worst of all - a muscle car that is by its very definition flies in the face of energy independance.

Lutz's role in turning the company around is undeniable. And Rick was certainly key to making that happen. But in my mind, the guy who is going to make the hard decisions to get us through this dark time might just be Fritz Henderson. He has only been in place as the Chief Operating Officer for about a year now, but he has really impressed me with the way he has stepped up to certain challenges internally. The guy really understands the business side of things. That's the guy that gives me hope right now.

JD - thanks for the comments. Regarding the marine engine business, you might be right in the long run. But there would most definitely be a hicup in the near term while all the parts get sorted out. Maybe the bigger issue will be the marine market just going completely in the tank due to the economy - especially if 3,000,000 are suddenly out of work - in which case they won't need engines for a while.

Edited November 14, 2008 by SunriseH2OSkier

[Guest J-Ro]

All I will say about Lutz is that he has qualities about him that are good, and others that are no so good. The good: The man knows what he wants, and you better not get in the way. He has no patience for red tape. He tells some really funny stories (I sit with the man in a meeting at least once every 3 months). We really needed that fresh perspective here. The not so good: sometimes what he wants is just not the right thing, but won't listen to anybody. Here's an interesting read for you. Prime example of not wanting the right thing is the Solstice/Sky roadsters. They are great little cars. But how many people out there are in the market for a small 2 seater? (Not nearly enough). It costs the same amount of money to develop a brand new 2-seater as it does say a minivan, or dare I say it, a Camaro. If we had done the Camaro instead of the Solstice, it would have been out in time to catch the retro craze. Would have sold a ton more of them than we ever did the Solstice/Sky. But Bob wanted the Solstice, so that's what we did. And as a result, we are still a few months away from introducing a car that will surely get criticized by many as being late to the game, too stuck in the past, and probably worst of all - a muscle car that is by its very definition flies in the face of energy independance.

That is the exact way I have read that he does things.

[SunriseH2OSkier]

That is the exact way I have read that he does things.

OK, WTH is going on around here? First Obama and Pelosi, and now I am seeing things the way J-Ro does? And I thought I was conflicted before...

[johnsvt]

^^^ Some interesting reading for me. Lutz is interesting for sure...I doubt I would like him as much as he likes himself. To bring the solstice/sky out before the camaro might have been a sin, but the delay of the camaro has and will help the car sell.

I/dealers have been told that selling cars is bad for GM. Why?GM loses money selling cobalts and make almost nothing selling a Malibu/Impala. I have always contended that the Japs did a good job of building decent cars, but more importantly how to make a PROFIT selling CARS.

[superjet]

I want to apologize for calling $2.65 gas by July. I was obviously waaaaaaay off and a couple months late.

Avg Gas Price

7/17 - $4.11

11/11 - $2.22

46% Decline

Oil per BBL

7/11 - $147

11/11 - $59

61% Decline

Good call. You and Semgroup only missed by a few months. They, however, went bankrupt on their bet.

[superjet]

There sure seems to be no talk these days about those darn speculators driving the price of oil down.

Agreed. No one is talking about it, but are you saying that you don't think they were involved in the price run-up?

Much of the speculation occured through large bank's trading operations. Liquidity problems hurt trading operations severly. Mass layoffs. I can assure you that there are far less trader's in the market these days and the hacks got weeded out quickly.

[Addictedto6]

The kids were watching a DVD this evening. This came up....it cracked me up & made me think of this thread.....

Schoolhouse Rock Energy Blues

Edited November 17, 2008 by Addictedto6

[JohnDoe]

Sunrise, you'd know better than me but I'm fine with the Solstice project. First GM car in 10 years where every single person who saw it for the first time said "What? That's a PONTIAC??!!" Camaro may sell more (probably will) but it wasn't going to signal something fun, new, and affordable like the Solstice did. From top to bottom, I love the current GM lineup, I'd take a Malibu over a Camry every day, but I have confidence in new GM products unlike many people who now buy Civics and Altimas who used to buy Tauruses and Caprices. It will take some time, but they're on the right track and I'm hoping for the best.

[68Slalom]

Sunrise, you'd know better than me but I'm fine with the Solstice project. First GM car in 10 years where every single person who saw it for the first time said "What? That's a PONTIAC??!!" Camaro may sell more (probably will) but it wasn't going to signal something fun, new, and affordable like the Solstice did. From top to bottom, I love the current GM lineup, I'd take a Malibu over a Camry every day, but I have confidence in new GM products unlike many people who now buy Civics and Altimas who used to buy Tauruses and Caprices. It will take some time, but they're on the right track and I'm hoping for the best.

Agree, GM is doing much better. I have two specific friends that are Harley owners that give me crap for riding/owning a rice rocket but then they are driving little foreign cars daily to work . I on the other hand own GM an Dodge vehicles not including the Bu I would rather be driving a BMW but don't want to pay the $$ when it's time to change the oil or service!!

Edit: At least gas is down for now!!!!

Edited November 17, 2008 by 68Slalom

[dlb]

I traded the idea of a BMW Z4 for a Yukon Denali when GM put out the employee pricing. It was too good a deal to pass up. So I guess I got a new toy hauler instead of a new toy.

[SunriseH2OSkier]

Sunrise, you'd know better than me but I'm fine with the Solstice project. First GM car in 10 years where every single person who saw it for the first time said "What? That's a PONTIAC??!!" Camaro may sell more (probably will) but it wasn't going to signal something fun, new, and affordable like the Solstice did. From top to bottom, I love the current GM lineup, I'd take a Malibu over a Camry every day, but I have confidence in new GM products unlike many people who now buy Civics and Altimas who used to buy Tauruses and Caprices. It will take some time, but they're on the right track and I'm hoping for the best.

I appreciate the comments/support. I do believe we have some top notch cars now, as you point out. And yes, it will take time for the masses to realize it. Unfortunately, time is against us at the moment.

My comment on the Solstice wasn't a jab at the car itself. As I said, it is a great little car. But for a company of limited resources (cash) and critically dependent on volume to bring in the revenue, I just can't help but wonder if the money spent on a car like that wouldn't have been better spent on a vehicle with a lot more volume potential. Maybe the Camaro wouldn't have been much better. But we could have used that same money to focus on a replacement for the Cobalt that could actually compete with a Civic. Instead, we wait another year for the Cruze to come out.

Do we get some positive reactions from the public when they see a Solstice or a Sky? Sure. But is it translating into more sales of G5s, G6s, Astras, or Auras? I don't have proof, but I tend to doubt it given the general attitudes toward the two brands. I can say with reasonable certainty isn't helping Saturn. Lutz brought the Astra here from Europe, and it has been a total flop in the market. The Malibu actually followed the Aura in revamping the midsize car. It is actually as good a car as the Malibu, but nobody knows it.

I guess my point is that we needed Lutz to bring back the passion to GM cars - and I think he has done that (along with Rick). But that was 'easy' when the market was strong and enough money was flowing in to cover our weaknesses. Lutz could play in his sandbox and do fun things like the Solstice. But maybe we needed to recognize our limited resources and limit our product line to match. We still need the passion, but we need to apply it where it will do the most good, and get rid of the rest.

BTW - Gas is $1.83 here tonight.

Edited November 18, 2008 by SunriseH2OSkier

[CTSunsetter]

I'm a GM loyalist, however, the CEO flying to DC on one of eight private GM jets to beg for my money irritates me. When questioned about internal cost saves he talks about job cuts?

[JohnDoe]

I'm a GM loyalist, however, the CEO flying to DC on one of eight private GM jets to beg for my money irritates me. When questioned about internal cost saves he talks about job cuts?

Flying private has its justifications. I can see it now, the hearing being called and Rick Waggoner being late thanks to (insert airline).

[hrybls]

There sure seems to be no talk these days about those darn speculators driving the price of oil down.

Agreed. No one is talking about it, but are you saying that you don't think they were involved in the price run-up?

Much of the speculation occured through large bank's trading operations. Liquidity problems hurt trading operations severly. Mass layoffs. I can assure you that there are far less trader's in the market these days and the hacks got weeded out quickly.

They played a role, however it takes two to tango, and each party is trying to make money. Leverage has created despeate sellers, so it could be more vicious on the may down, at least they had an option to buy on the way up, now its forced.

[Malibudude]

Jerry,

I like how picktrucks.com rated the F-150 the best truck when it has the weakest engine of all models tested makes one wonder who funded it. It's a nice truck don't get me wrong but just made me go hummmmm.

Imho Saturn has changed the face of GM, overhauled to produce vehicles that are competitive aesthetically which let's face it hasn't been the Generals strong suit for many years. I know it hasn't brought the profit as hoped but still I think mentally it's helped change the thought about GM designs maybe just a bit....

[SunriseH2OSkier]

Don't know much about pickuptrucks.com, but took a quick glance at their article. A couple thoughts come to mind:

(1) Seems a bit odd the disparity between the Chevy and GMC results. Didn't look real close at the specific descriptions of the two vehicles to see if they had different engines - but on the surface they look to be identical. And given that they are in fact the same basic truck, not sure how the Chevy is 2nd and the GMC a distant 5th?

(2) Yes, the Chevy took 2nd to Ford, Toyota 3rd, Dodge 4th. Not sure in the end it really matters though, nor do I think it says much about who is funding the comparison. They are not calling out such drastic differences in the total scores as to say definitively one truck is better than another. Bottom line is that loyalty in this market is far and away a more dominant factor. If people are inclined for Ford, then the Ford is best to them. Likewise for a Chevy or the Toyota. And for a market segment that is shrinking rapidly (earlier this year it was gas, now financing, and in the future, emissions regs that will force most out of the market), it really just doesn't make much of a difference.

As for the Saturn brand, not sure how widely accepted a notion it is that Saturn has changed the face of GM. Surely at one time it had the chance to do so. But a decade of product line stagnation eroded that halo. We were too slow to expand their product line, certainly too slow to turn their existing line over to show improvement. They have a good lineup now, but again, don't know that the public recognizes it. Even before the market fell apart this year, the Astra was selling at only 20% of the volume that the Ion it replaced did (and the Ion was not stellar by any means). I mentioned earlier that the Aura is a great car, equivalent in many ways to the new Malibu, but nobody knows it. In fact, the car does not have the Aura name anywhere on it - most people when surveyed don't have any idea what it is, let alone that it is a Saturn (the Saturn badge has one of the lowest rated brand recognition scores of any manufacturer out there). The Outlook is nice, but it is one of now 4 Lambda offerings in the GM lineup (Chevy has been added to the Saturn, GMC, and Buick versions). And I've already commented about the lack of a market for 2 seaters out there (Sky).

Part of the reason Saturn is languishing in anonymity is the fact that there are not enough advertising dollars to go around for all the nameplates in the GM stable. So Chevy and Cadillac gobble up most of it (I think for the right reasons), leaving the rest to fight for very little. And when you have to spend engineering dollars on each of the variants, well, that speaks for itself. Yes, the underpinnings of the variants are the same and generally only have to be done once. But the body metal is all different: means unique engineers to design/release the body parts, building more test/durability vehicles, means more dollars spent on dies to bang out the metal. And when you can't afford to advertise the extra variants, who even knows about them to go buy them?

I should modify one thing I said before. We probably need to keep Buick around as well. Not so much for the North American market, but rather for China. The Buick name is highly respected there - we actually sell more Buicks there than here (by a lot).

Back on topic - Gas is $1.77 tonight. Un-freaking-believable. We've had a lot of conversations on the merits of ethanol in the past. Gasoline is actually cheaper here right now than E85. When there is only 15% of the fuel that is petroleum based, the price can only go so low. And with 30% less energy content? Definitely not a good buy. I can imagine a few underground ethanol tanks are getting stale...

[areamike]

1.65 here in a few places in Indiana. This does not mean we as a nation should relax about gas/oil prices.

[SunriseH2OSkier]

I'm a GM loyalist, however, the CEO flying to DC on one of eight private GM jets to beg for my money irritates me. When questioned about internal cost saves he talks about job cuts?

Yeah, those guys aren't exactly shining bright yesterday and today. IMHO, the only one that might have come off worse than Rick was Gettelfinger, who didn't do the UAW any favors with some of his answers. The shame of it is that a lot of good work has been done by both management and union to get costs under control, even if it will take until 2010, but they are doing a terrible job explaining any of it. I think these guys are treating this too much like the witness stand, afraid to say anything inaccurate or throw one of the others under the bus. They need to be speaking more from the heart, and less from the facts on the papers in front of them. I have absolutely no doubt that Wagoner knows our company and all the initiatives that are in place, how much we are burning through each month, on and on. But I cringe every time he goes to answer a question and wants to first establish all the assumptions that go with the answer. It just looks like he has something to hide.

All that said, these clowns on Capitol Hill are doing an awful lot of grandstanding too. I haven't figured out if some of them are just putting on a show for their constituents, or if they really are as clueless as they seem about some of the dynamics involved in this whole situation. A 'prepackaged' or 'prenegotiated' bankruptcy? Puhlease. They can't possible think a situation with so many players can possibly be settled in short order. Unless of course they are morons. And I can't remember the one guys name that claimed yesterday that in 30 years we've done nothing to improve the fuel economy of a 1/2 ton pickup, based on his experience. Reality is a hell of a lot has been accomplished, all the while emitting probably a 1000 times less polutants than it did 30 years ago. Does he think that a vehicle that weighs as much as these full size trucks do are going to get 30 mpg? Does he realize that you can take any car capable of 30mpg and get half of that based on the individuals driving habits? He's either grandstanding, or he is a moron.

The guy from UofMaryland (I think) they brought in to counter the Big 3 is a bit whacky in his assumptions as well. He challenged the notion that nobody will buy a car from a bankrupt company by arguing that if the big 3 go under, demand will outpace supply, and customers will have no choice but to buy from the big 3. Not sure what world he is living in, but last I checked, there's no financing available, nobody's buying anyway, and nobody is predicting it will get much better until (maybe) 2010. People do have a choice - hold off their purchase, buy used, wait for the next shipment from Toyota/Honda/whoever. Chapter 11 if a non-issue here. Go directly to Chapter 7, do not pass Go, do not collect $200...

I don't know, maybe it's what we deserve, maybe it is where this all needs to go. Just realize the potential consequences to this country if we allow it to happen. I pray we don't.

[johnsvt]

I have read that some of the senators backing the bankruptcy option for GM have Japanese or Korean car manufaturers in their own back yard. Unfortunately these a**clowns think with GM and Chrysler gone their states will gain because the Asian carmakers will have to ramp up production to meet demand. Friggin retards. Execs from toyota, honda, and hyundai have all said that some of the suppliers put out of business by any one of the big 3 filing chapter 11 won't be able to supply them and thus their production/profits will be hurt.

I do feel as though the top brass of the Big 3 are being villainized/ridiculed by our government right now. I don't understand why. The government was quick to bailout AIG and have renegotiated their bailout 3 times and the money AIG has gotten is much more than the 25bn that the big 3 are asking for. I guess it is ok to bail out the white collar worker and let the blue collar guy suffer.

A chapter 11 by GM will probably cost me about 8K personally. I also suspect a GM chapter 11 will lead to me looking for a new job.

[footnlongline]

I do feel as though the top brass of the Big 3 are being villainized/ridiculed by our government right now. I don't understand why. The government was quick to bailout AIG and have renegotiated their bailout 3 times and the money AIG has gotten is much more than the 25bn that the big 3 are asking for. I guess it is ok to bail out the white collar worker and let the blue collar guy suffer.

Agreed, The top 3 are victims of the mess caused by the likes of Bear Stearns, AIG, etc. and not the cause of it.

[hrybls]

Now with oil below $50, Where is the oil companies bailout???????