GM reinvention commercial

no doubt in my mind that the commercial says all the right things in the right way... but that aint gm talking. its a well paid top of the line ad agency doing their job and most likely doing it well.

now that i have said that i may even check the commercial out since i am unlikely to see it on TV

 

Really?

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No, that $20 million is not guaranteed, according to this: Ex-CEO Wagoner still getting his General Motors paycheck? - Open Road: A conversation about the cars and trucks we drive - USATODAY.com

Hopefully Geithner will do the right thing.

 

Yes, your post said "without a golden parachute," and that remains to be seen...

 

That assumes that the incompetence that lead to this situation has been purged. I have seen no sign of that. It's not like they had a shakeup where they decided to elevate engineering to a higher focus than before. Unless GM stops the continuing trend of losing market share, they are dead, regardless of what happens and how much of a boost this "transformation" provides. Don't lose sight of that.....like GM did.

Ford may have the initial drawback of having more obligation, but I'll still put more bets on them to return to profitability first. The Ford Fusion Hybrid is getting pretty good marks in the forum. Why is that? Could it be that they are successfully working on making really popular vehicles?

 

Reinvention? Already?
If the ad still comes first, maybe nothing's changed.
First you design the car, then you build it, then you sell it. GM, yet again, is following those steps in reverse order.

 

I only blame the government for being in collusion with GM to empower them to make this move (and to make it sound, in the press, like the government is "bailing out" GM). I also blame the government for allowing GM to take this approach when many analysts believe it is being perpetrated to allow GM to "recover" with the least amount of effort - and pick up a few bucks of our money in the process.

Seizure is not ownership. You are right, there is precedent of the government stepping in to take over a company temporarily to help save it. During times of war presidents have used emergency power to do so (although FDR was slapped down by the Supreme Court for his National Recovery Act, indicating there are limits on how far even emergency powers during war time can go). Also, some regulatory agencies have, in their charters, the ability to also suspend operation of and otherwise disolve institutions that have foundered. This was the case in the S&L debacle of the 1980's:

"The U.S. government agency FSLIC, which at the time insured S&L accounts in the same way the Federal Deposit Insurance Corporation insures commercial bank accounts, then had to repay all the depositors whose money was lost. From 1986 to 1989, FSLIC closed or otherwise resolved 296 institutions with total assets of $125 billion. An even more traumatic period followed, with the creation of the Resolution Trust Corporation in 1989 and that agency’s resolution by mid-1995 of an additional 747 thrifts. [8]
A Federal Reserve Bank panel stated the resulting taxpayer bailout ended up being even larger than it would have been because moral hazard and adverse selection incentives that compounded the system’s losses. [9]

There also were state-chartered S&Ls that failed. Some state insurance funds failed, requiring state taxpayer bailouts."

BTW, that one cost the taxpayers $124.6 B ($202.8 B adjusted for inflation - an interesting number to compare to the bank bail-outs lately). It also threw the country into a recession (again, an interesting comparison to now, hm?).

So, we see that the S&Ls were never owned by the government, or even by FSLIC or RTC. They used their Congressionally-authorized, chartered powers to solve the situation.

What makes GM different is that the Administration will own controlling interest in GM (actually own the stock) once GM comes out of bankruptcy. Not all of Congress, however, believes the President is acting within his powers. Some are calling for an investigation into the fact he acted without Congressional authority in allocating money to Chrysler and to GM, an issue that strikes at the seperation of powers. I believe other groups will follow with other calls on the legitimacy of the government owning controlling interest in a public corporation.

I'm not a Constitutional Scholar, just a humble Management Scientist. But in studying management, and advising companies and CEOs I do know a bit about what companies and the government can and can't do. I'm expressing my "scholarly" opinion here. I may be wrong - only time will tell. If we see law suits flying once the government has those stock certificates in hand (and I believe they will) then I can't wait to see the outcome.

Too bad, because I support the current Administration, but feel they've overstepped their authority on this.

Jay

References:

Savings and Loan Crisis. (2009). Retrieved June 9, 2009 from [ame="http://en.wikipedia.org/wiki/Savings_and_Loan_crisis"]Savings and loan crisis - Wikipedia, the free encyclopedia[/ame]

 

"Reinvent" is not a good word.

Inventing something that someone already invented is not invention. When is "reinventing the wheel" a good thing? The word also indicates a waste of time.

 

GM has the product now and more in the pipeline, they just need to change public perception. Quality, mpg, horsepower, style, whatever you want GM has it. I know I will get hammered on this because GM does not have anything yet to compete with the Prius and go after that 2% of the market.

 

Ever the salesman, aren't you?
I'll be polite, but I'm still not buying. Changing public perception is going to be a very hard sell. What good is a 10 year warranty from a bankrupt company? How is GM going to demonstrate a good history of reliability with a bunch of new models built by disgruntled employees with leftover parts, and rushed to market? And bigger and flashier ads at this point may well backfire - the public is on to the "all show and no go". You show up in your private jets, begging for handouts, get the boss to fall on his sword, and then give him 20 million bucks of OUR money. Where's the Volt? Long live the EV1! Laugh at that 2% all you want - it's growing faster than your stock is falling. And when gas goes up again, you're toast. Even my go-fast buddies with their Corvettes and the big tough football players with their monster trucks are looking at hybrids. You should have bought that Toyota dealership when you had the chance.

Oops. Sorry. Not so polite. The more I thought about it, the more upset I got.

 

I may end up with the toyota store by default, the blue sky is killing the owner in this market.

I am not laughing at the 2% just reminding you that it is 2%. Your go-fast buddies are looking at Priuses?
Gas will go up in th eshort-term but in this economy the rise in gas prices is just speculation, many places in the world are running out of places to store it. As the public employees begin to get hammered by cost-cutting and the commercial real-estate bubble bursts, the economy will recieve another huge blow in the short-term. don't fool yourself about gas prices, over the next 7 months they will fall to a lower bottom than they did over the last 10 months.

 

Can i have some of what you're smoking?

 

Prius sale represent 2.2% of all passenger cars. For the mid-size family sedan market, the percent should be a lot more.

 

The futures markets are structured in a way that does not ever require delivery of the physical product. Instead, positions can be, and are, cashed out. The vast majority of physical oil, and other commodities, is contracted off-market but is still priced in terms of the 'discovered' price in the futures market. The fact that no delivery is required means that the discovered price is solely down to the supply and demand of the paper (or bits), not the actual product.

The bank bailouts and change to remove the mark-to-market requirement (which allowed banks to restate their assets to disguise losses) have caused a vast increase in funds 'invested' in commodities, as indicated by the increase in trading volume and open interest. Look at weekly charts - right now the daily charts are showing falls in open interest for next month's delivery, but that's only because speculators are 'rolling' their positions to the following month, as next month's contract is about to be closed out. (Crude Oil closes on the 15th of the month.)

High or rising open interest usually means that the current trend will continue.

Oil has gone up $20 in the last month, and it will continue to do so until something stops these speculators. The US House Agriculture committee (not the obvious choice, except that the farmers have been complaining about the huge disconnect between their commodities futures markets and sensible pricing) wrote a bill, H.R. 977 ('Derivatives Markets Transparency and Accountability Act of 2009') to clamp down hard on futures speculation, but it's since been stuck in the Financial Services committee.

The only other thing that will stop them is another credit crunch.

 

didn't you tell me that about this time last year?

 

Of course, with a s****y economy, don't expect anything to sell, especially high margin pickups and suv's that get iffy fuel economy. Most of the subprime stock has been foreclosed by now. What I find interesting is that more and more foreclosures are traditional "good credit" folks who have lost their jobs

This situation has left me torn. On the one hand, I fear either a sudden fiscal collapse, or a long period of slowly declining wealth and opportunity, and I really do have some sympathy for those folks who have lost their homes

On the other hand, compared to the teeny returns my "safe" investments are now averaging, its a good time to go shopping foreclosed homes. There are good bargains out there

 

I think the commercial real estate will see the same cratering over the next 6-18 months, there will be steals everywhere. As usual cash is king.

 

Commercial real estate is already starting to crater here. Some brand new strip malls are vacant. Ouch.

 

To me the commercial or more precisely GM's position, is sad. In another thread, I swear before I even saw this commercial, I posted in comparison to Toyota that I thought the past decade or so, Toyota had done the inventing IE: Prius, Hybrid technology, while GM had coasted along primarily selling big trucks and SUV's. Now GM is forced to try and re-invent. It's better to be the inventer than try to be the re-inventer.

The commercial is fine, it says all the right things BUT in the business world re-inventing yourself while simultaneously trying to stay in business and be competitive is a very difficult prospect.

As an American I can't feel anything but saddened by the reality of GM's plight. GM might of brought it upon themselves by not being foresighted enough in product development but the downsizing and re-invention of a smaller, leaner, and goverment/taxpayer owned GM is scary. GM not very long ago was the worlds largest car producer. I hate to see plants, dealerships closing and people losing their jobs. Plus I don't know how goverment involvement in GM is going to play out.

The commercial is fine, but you can't buy and drive a commercial. In GM's re-invention they need a "hit". Perhaps a series of hits. GM is now under a extreme microscope. People are going to be watching closely what they do, what products they release. Tough enough enviroment for ALL car makers right now, incredibly tough enviroment to be asked to re-invent yourself.

Maybe we all should of seen it coming, but to me, the commercial and the reality of GM's plight is sad. I hope for a miraculous comeback for GM. I really want to see GM succeed. However, even as hopeful commercials are run, the reality for me personally is GM offers no product I'd really like to own.

The first new models released out of this re-invention are going to be crucial. They have to be better than just good, they have to be great.

 

Malorn, you are quite the comic.
You state GM has 'everything you could want' and then in the same post you mention what GM doesn't have.
You positions and predictions loose all credibility when you make your statements so obviously false.
GM HAD the lead in technology, and threw it away.
GM MAY have a good thing with the VOLT, but it is three years later than it should be.
By the time it hits the streets, I will likely have two all electric vehicles (two car family). Although if not, I will definately take a look at one if it is the best option when/if it does come out.