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General Motors Said to Be Nearing Collapse
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Dieseljim
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PostPosted: Thu Mar 05, 2009 8:57 am    Post subject: General Motors Said to Be Nearing Collapse Reply with quote

Latest in the news as GM auditors expressing doubts about General Motors ability to continue as a going concern, which if proven to be true, puts GM in great danger of going under. I would attribute it not only to bad decisions made by company executives over what kind of vehicles to build and try to sell, but the price gouging engaged in by the Oil Industry, which, perhaps ought to be nationalized, thanks to the gas prices that are starting to creep back up again, while demand for gasoline remains depressed and the cost of crude is down as well. This whole darn economy, it seems to me has been one heck of a house of cards and the cards are falling one by one. Not only could GM go under, but if the Oil Companies revert to their price gouging ways of last year, Greyhound Lines and some other large bus companies could go under as well. The way the price creep is going, demand seems to have little do do with it. It's manipulation by the oil companies and a sneaky form of price fixing and market rigging, both clearly illegal under our antitrust laws. Perhaps it is time to make the airlines get rid of most of their short haul flights and concentrate on long hauls, which is what they would be best at, especially in light of the Flight 3407 tragedy near Buffalo,NY last month.
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RailBus63
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PostPosted: Thu Mar 05, 2009 10:26 am    Post subject: Reply with quote

I can't buy this. Read Rude Awakening: The Rise, Fall, and Struggle for Recovery of General Motors. GM has been in trouble ever since the Arab oil embargo of the early 1970's ended the dominance of the gas guzzler. They have been steadily losing market share to Toyota, Honda and everyone else since the 1980's. Starting with then-CEO Roger Smith, management was unwilling to make the difficult decisions to reduce the cost of building cars and too often preferred to invest in aviation, electronics and other non-automotive businesses. When they finally did begin to catch up and build a better product, they made the disastrous decision to focus on the SUV market and have not been in a position to weather the collapse in demand for this latest generation of gas guzzlers. During all this time, oil prices have collapsed, rose, peaked and collapsed again. It's not the oil companies fault that GM is on the precipice of bankruptcy.
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Hart Bus



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PostPosted: Thu Mar 05, 2009 11:36 am    Post subject: Reply with quote

So Deloitte & Touche is finally getting religion? Where were they (as Haskins & Sellls or Deloitte, Haskins & Sells) when Robert McNamara ripped GM off for half a billion dollars 20 years ago? No word of recovery, malpractice suits and they stayed on as GM's auditors for the last 100 years.
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Dieseljim
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PostPosted: Thu Mar 05, 2009 3:39 pm    Post subject: General Motors Said to be Nearing Collapse Reply with quote

I just ordered the book from amazon. In addition another good one is ON A CLEAR DAY YOU CAN SEE GENERAL MOTORS by John DeLorean, who pointed out that General Motors' troubles began even before the energy shocks of the 1970s and may have begun with the rear-engined car Corvair, not only exhaust fumes entering the cabin, but handling characteristics that gave that car a nasty habit of tucking under and rolling over if turned too sharply. By the time the problems were licked with the 1969 models, the damage had already been done. The Corvair also came in a truck/van variation called the Corvan for the panel truck style van or Greenbrier for the windowed passenger van, which I remember quite well, having ridden in it numerous times.
RailBus63 wrote:
I can't buy this. Read Rude Awakening: The Rise, Fall, and Struggle for Recovery of General Motors. GM has been in trouble ever since the Arab oil embargo of the early 1970's ended the dominance of the gas guzzler. They have been steadily losing market share to Toyota, Honda and everyone else since the 1980's. Starting with then-CEO Roger Smith, management was unwilling to make the difficult decisions to reduce the cost of building cars and too often preferred to invest in aviation, electronics and other non-automotive businesses. When they finally did begin to catch up and build a better product, they made the disastrous decision to focus on the SUV market and have not been in a position to weather the collapse in demand for this latest generation of gas guzzlers. During all this time, oil prices have collapsed, rose, peaked and collapsed again. It's not the oil companies fault that GM is on the precipice of bankruptcy.
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Dieseljim
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PostPosted: Thu Mar 05, 2009 3:42 pm    Post subject: General Motors Said to be Nearing Collapse Reply with quote

I am surprised that McNamara did not end up getting whacked like Jimmy Hoffa because of this, for GM's top brass would have had a reason to get rid of him because of it, half a billion reasons for a whack job on McNamara.
Hart Bus wrote:
So Deloitte & Touche is finally getting religion? Where were they (as Haskins & Sellls or Deloitte, Haskins & Sells) when Robert McNamara ripped GM off for half a billion dollars 20 years ago? No word of recovery, malpractice suits and they stayed on as GM's auditors for the last 100 years.
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Hart Bus



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PostPosted: Fri Mar 06, 2009 1:16 pm    Post subject: Re: General Motors Said to be Nearing Collapse Reply with quote

Dieseljim wrote:
I am surprised that McNamara did not end up getting whacked like Jimmy Hoffa because of this, for GM's top brass would have had a reason to get rid of him because of it, half a billion reasons for a whack job on McNamara.
Hart Bus wrote:
So Deloitte & Touche is finally getting religion? Where were they (as Haskins & Sellls or Deloitte, Haskins & Sells) when Robert McNamara ripped GM off for half a billion dollars 20 years ago? No word of recovery, malpractice suits and they stayed on as GM's auditors for the last 100 years.


Maybe the Suffolk County DA got to him first. Got him for bribling the Town of Crookhaven (Brookhaven) zoining offcials where he was diverting those funds into real estate development. Also supported a lot of local charities prior to the scam.
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Mr. Linsky
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PostPosted: Fri Mar 06, 2009 5:25 pm    Post subject: Reply with quote

I think that the time has come (said the walrus to whatever) to end speculation as to why GM finds itself where it is now, and concentrate more on what the future (if any) will bring for the company!

Rumors of bankruptcy are reaching a fever pitch and, in fact, there are reports that GM is relenting and may just file for a special reorganization underwritten by the government (whatever that is?).

However, it may be far too late for reorganization or legal maneuvering of any kind as it will only serve to erode customer confidence even further.

I'm afraid that liquidation may be the only route for the company at this time, and such a task will be daunting when considering everyone and everything it will involve.

Liquidating an auto manufacturing company, and especially one the size of GM, is not like closing the corner drug store and could takes years of planning and implementation.

Of course, the number one asset (and I use that term loosely) would be the company’s nameplates which include Cadillac, Buick, Pontiac, Chevrolet, Hummer, Saturn and Saab (although GM’s Saab division has already filed for bankruptcy in Sweden).

Cadillac, which has never been profitable, would have little chance of surviving as a free standing entity and with Mercedes, BMW, Lexus and Audi on the scene it is doubtful that any buyer would be interested in it even as a division.

Buick, on the other hand, does very well overseas and might be easily sought after by either TaTa of India or the Chinese.

Pontiac is a goner – sad to say.

Now, Chevrolet presents a whole different picture in that it has been the backbone of the company since time immemorial and still shows signs of life – it has always been said that ‘Chevrolet is General Motors, and General Motors is Chevrolet’!

Given the right direction by a new ownership, Chevrolet could well outlive GM and go on for years to once again become America’s best selling car!

Hummer, for what it’s worth, is now passé and its future is really nowhere!, and Saturn becomes a victim of circumstance!

What makes such a transaction even more difficult and complicated is both warranties and parts for those GM vehicles of recent vintage that are still entitled to coverage’s.

With the exception of stampings such as doors, roofs and fenders, hoods and trunk lids which are among the only parts actually made at GM’s factories, most everything else may remain available from the original contracted suppliers.

However, warranties will be a tough one to figure out and I can’t even venture a guess as to how that will be negotiated – if at all!

Other aspects of a liquidation would include thousands of real estate parcels mostly made up of factories which would be a tough sell in this economy.

I could go on and on but I think you get the idea.

And, of course, we can’t even begin to assess what affect the liquidation of such a large company would have on our economy in general – it’s frightening to even think about!

Mr. Linsky – Green Bus Lines, Inc., Jamaica, NY
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Dieseljim
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PostPosted: Wed Mar 11, 2009 7:07 am    Post subject: General Motors Said to Be Nearing Collapse Reply with quote

I just got that book that you reccommended and from what I have read so far and you have hit the nail right on the head while I smash m fingers with the hammer, lol. They also had serious quality control problems as well, with the Vega and the Corvair being two of the most glaring examples, with the Chevy Cavalier turned Cadillac Cimarron being another ( I know someone who had a Cimarron). I bet Alfred Sloan is spinning in his grave now. And so for that matter is Billy Durant who founded GM in the first place. Compared to them, the top men who came after them were mostly a bunch of peabrained morons who thought they knew it all till the Japanese started rubbing their noses in it.
RailBus63 wrote:
I can't buy this. Read Rude Awakening: The Rise, Fall, and Struggle for Recovery of General Motors. GM has been in trouble ever since the Arab oil embargo of the early 1970's ended the dominance of the gas guzzler. They have been steadily losing market share to Toyota, Honda and everyone else since the 1980's. Starting with then-CEO Roger Smith, management was unwilling to make the difficult decisions to reduce the cost of building cars and too often preferred to invest in aviation, electronics and other non-automotive businesses. When they finally did begin to catch up and build a better product, they made the disastrous decision to focus on the SUV market and have not been in a position to weather the collapse in demand for this latest generation of gas guzzlers. During all this time, oil prices have collapsed, rose, peaked and collapsed again. It's not the oil companies fault that GM is on the precipice of bankruptcy.
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timecruncher



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PostPosted: Wed Mar 11, 2009 7:18 am    Post subject: Reply with quote

Quote:
"The time has come," the Walrus said,
"To talk of many things:
Of shoes--and ships--and sealing-wax--
Of cabbages--and kings--
And why the sea is boiling hot--
And whether pigs have wings."

Lewis Carroll -- from Alice Through the Looking Glass


There is a lot of blame to go around with the possible demise of GM, but things began to look bleak to me as they spun off various divisions in recent years -- divisions that should have been profitable.

First it was truck and coach -- and anyone who has been around transit since the sixties recalls how cheap and tinny the new-look coach got in the last years. During the transition era from private to public transit in the early seventies, GM kept up with its bad quality control, tried to adapt old designs to new technologies (anyone who drove a new look with an 8V71/VS transmission package knows this, as well as anyone who drove one with a wheelchair lift and no power steering!).

The RTS series, beloved by many, was overweight, over-built, poorly-designed in several areas, and too costly to build. Hence, Flxible flourished with their 870 and Metro while GM got an order here or there and dealt with warranty problems.

They then spun off Detroit Diesel -- another brand that simply did not adapt to Congressionally-imposed emission control measures, then Electro-Motive Division. Again, huge market share was lost to Cummins and GE Locmotives, respectively.

If I were a stockholder of the company in the eighties and nineties, I would have been screaming for the heads of the board members -- but apparently there was mostly silence from the investment crowd.

At the same time Toyota and Honda (and now Hyundai) were gaining market share with well-designed, well-built, reliable and economic vehicles, GM continued to build gas-guzzlers with shoddy components and poor workmanship, not even trying to match their foreign competitors for product quality.

Actually, this can be said of GM and Chrysler both -- rather than build good vehicles that could actually compete with the Japanese and Koreans, they simply moved their manufacturing south of the border for cheaper labor. So while the Japanese created new, good-paying jobs here in the US, GM and Chrysler (and Ford to a lesser extent) were creating jobs in Mexico and Korea building the same crap that they had been building here, but cheaper!

Personally, I lay the demise of GM and Chrysler right at the feet of their executive management, and put the UAW just slightly to the side for their contribution to the collapse of the domestic auto, truck and bus industry.

It is, of course, much more complex than what I have outlined, but bottom line is the fact that the domestic auto and truck industry has been stodgy and unwilling to progress while the non-domestic industry drove by in the fast lane!

Damn shame...

timecruncher
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RailBus63
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PostPosted: Wed Mar 11, 2009 9:33 am    Post subject: Reply with quote

timecruncher wrote:
The RTS series, beloved by many, was overweight, over-built, poorly-designed in several areas, and too costly to build. Hence, Flxible flourished with their 870 and Metro while GM got an order here or there and dealt with warranty problems.


The biggest flaw in the RTS design, in my opinion, was its role as the first major bus model to put style over substance - in this case, it's slanted front and rear end and tapered sides reduced passenger capacity, and its narrow front entrance precluded the use of the front-door lift that many properties wanted. All of these various issues left the door wide open for GM-Canada, Flyer, Gillig, Orion, Neoplan and others to push GMC aside and gain the majority of market share in the transit bus field. Gillig in particular recognized that there were many smaller transit agencies that would be more than happy to buy a no-frills, medium-duty transit coach, and has steadily expanded this market ever since - in Massachusetts, all of the smaller regional transit agencies that were diehard RTS customers into the mid-1990's have all gone to Gillig since then. The RTS likely would have died a lot sooner than 2002 if the New York City Transit Authority hadn't almost single-handedly kept the model alive through the 90's.

Quote:
They then spun off Detroit Diesel -- another brand that simply did not adapt to Congressionally-imposed emission control measures, then Electro-Motive Division. Again, huge market share was lost to Cummins and GE Locmotives, respectively.


What happened to the Electro-Motive Division is a microcosm of GM's struggles in recent years. In the 1970's EMD absolutely owned the North American locomotive market, from switchers to branchline diesels to road units to passenger locomotives. They began squandering this advantage first by replacing the SD40-2, a ruggedly basic design that was one of the greatest American locomotive models ever built, with the disappointing SD50. General Electric quickly took advantage with its improved Dash 8 series and achieved the previously unthinkable - they began outselling EMD. The popular F40PH passenger locomotive was similarly discontinued as GM strangely showed little interest in the growing commuter market, and again GE struck a blow by capturing Amtrak's business with its new Genesis series. Around this time, the rumors began that General Motors was no longer interested in the locomotive business, but nothing happened for over a decade. Even when EMD caught a break - in this case, being the first to offer a successful AC traction freight locomotive - they couldn't capitalize and GE again took advantage and captured the majority of sales.
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Mr. Linsky
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PostPosted: Wed Mar 11, 2009 1:49 pm    Post subject: Reply with quote

I may have already posted this elsewhere on the site but it is so apropos that I'm re-running it here!

I can’t come up with answers as to what Congress should do about the present dire situation that the auto manufacturers find themselves in – I believe it may be a darned if you do and darned if you don’t scenario with no prediction as to how it will turn out.

However, I saw the handwriting on the wall as far back as 1985 when I wrote the following letter to L. B. Pryor, the then General Sales Manager of the Cadillac Motor Car Division of GM, in answer to his published statement that Cadillac sales had slumped due to a UAW strike which hurt his division more than any other.

Dear Mr. Pryor,

I have read of the negative 1985 Cadillac sales figures, and your reason for this apparent decline, including a UAW strike that you claim hurt your division more so than any other in the company.

Well Mr. Pryor, I think you’re wrong!!

Speaking as a loyal Cadillac customer, and living in Long Island’s famous ‘Five Towns’ (which was the Cadillac capital of the world), I can tell you of the real reasons for this slump;

Your division has somehow finally managed to desecrate a name that has been synonymous with luxury motoring since 1902!

It started some years ago when you had the audacity to introduce the Cimarron, which we laughingly call a ‘Chevrolac’ and which no more deserves the prestigious Cadillac crest than the Chevrolet whose body it bears!

If that were not enough Mr. Pryor, you added insult to injury by expecting us to accept your latest ‘brainstorm’; take a good look at Cadillac’s 1985 ‘downsized’ versions (ie; the coupes, sedans and Fleetwoods) and tell me honestly that you can still call them Cadillacs!

Most of us who have cared enough (and spent enough) to make Cadillac a household name in transport don’t appreciate what it has evolved to, with its tiny trunk, ‘unimpressive’ front end and the lack of safety that a large car offers!

You people are just not receptive to what your customers want, and the 85 limousines more than prove this point.

The upper crust now shows interest in customized and elongated personal transportation, and several specialty companies are successfully marketing stretched Lincolns and even some leftover large Cadillacs.

As the only manufacturer of genuine limousines in this country you could have capitalized on this trend. Instead, you took the ‘hallmark’ or ‘flagship’ of the line and made it even smaller!! Maybe you can explain the logic of that Mr. Pryor! In fact, I dread seeing the changed Eldorados and Sevilles as I am certain that you took that bit of success and destroyed it!

I hope that my criticisms have not been to harsh Mr. Pryor, and that you take them in the spirit in which they are intended. Perhaps a few more notes such as this from your customers will help to bring back a heritage that is now only a memory!

In ending this letter Mr. Pryor, I will leave you with one short anecdote: there is a standing joke in my neck of the woods which implies that if you’re ever run over by a car it will probably be a Mercedes, a Jaguar or a Lincoln (no one seems to mention Cadillac any more!).

Thank you most kindly for your time.

A. Linsky
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timecruncher



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PostPosted: Wed Mar 11, 2009 2:38 pm    Post subject: Reply with quote

Here is the definitive text on the subject of the demise of General Motors (and Chrysler) -- looks as if Ford figured it out just in time...

The speech found on the site below is spot-on, and spreads the blame around. What I found interesting is just how stubborn and immovable GM executives were over the past 35-40 years as foreign competition moved on-shore and began building solid, well-designed autos for people who wanted to keep their car for over ten years and over 100,000 miles.

www.hillsdale.edu/news/imprimis.asp

timecruncher
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Dieseljim
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PostPosted: Thu Mar 12, 2009 6:17 am    Post subject: From Road Kings to Roadkill Reply with quote

After reading all these most excellent posts, to gether with the book that I am now in the process of reading, I am getting a much better idea of how our once great automakers have gone from being Road Kings to ROADKILL. Perhaps the executives should have read Daughen and Binzen's WRECK OF THE PENN CENTRAL, in which there are plenty of lessons that are still applicable to this day just as they were when that railroad went under, taking the Lehigh Valley with it 3 days later. Wreck presents a shining example of HOW NOT to solve corporate problems. and HOW NOT to merge two bitter rivals together. Thus when you mix RED and GREEN together, you get a brownish gooey mess. Essentially the same has happened at GM, and to a lesser extent, Chrysler. No doubt the likes of Ransom Olds, David Buick,Louis Chevrolet, Billy Durant, Alfred Sloan, Walter Chrysler, the Dodge Brothers, and Henry Ford are all spinning in their graves over the nonsense that has brought down their companies. The Olds Division was done away with about 10 years ago. Pontiac could be next.
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Dieseljim
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PostPosted: Sat Apr 25, 2009 7:54 am    Post subject: General Motors Restructuring_End of Road for Pontiac Reply with quote

It looks like General Motors is finally coming to its senses in its restructuring plan: The Pontiac brand is on the chopping block, along with the GMC brand on the truck line up, which has been essentially duplicative of Chevrolet's truck line, duplication that should have been weeded out long ago. GM is keeping Chevrolet, Cadillac,Buick, and I think Saturn. Hummer is a goner, too. They are jettisoning SAAB and Opel as well. I see hope for GM yet. Ford got rid of Land Rover and Volvo, which were really incompatible with Ford to start with. As for that basket case, Chrysler, I see the alliance with Fiat as their only hope. This Detroit soap opera is getting more interesting as events roll along. It's even better than the soaps on tV, which are ALL WASHED UP, pun intended, lol.
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Hart Bus



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PostPosted: Sun Apr 26, 2009 11:41 am    Post subject: Reply with quote

I agree with the jettisoning of Ponttac. While it was an exciting and vibrant brand years ago, with the GTO, Firebird, Bonneville, Tempest, etc, the pizzazz was taken out of it by the dumbells in Detroit. When they brought back the GTO, nameplate, it looked nothing like the original. It would not get middle-aged men to go out an buy it. Also no plans were announced to market an updated Firebird, like Chevy is doing with the Camaro.

The loss of the Pontiac brand won't be missed. The Chevy Camaro, will get the Firebird crowd and well as most of the GMC truck crowd.
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