Talk Show on GM

Warren Ulney on "To The Point" hosted a discussion about the present plight of General Motors. In case you didn't hear it, I'm posting a summary of the program; subjects not necessarily in logical order:
1. Too many models; GM ends up competing with itself rather than making inroads into the competition. Models are lackluster "generic cars" with not much sex appeal.
2. GM has enormous health care costs and pensions to support. Fighting against both increasing health costs and very strong UAW determined to keep GM health care the best in the country.
3. Poor overall quality with some exceptions.
4. GM's cost per unit exceeds the value consumers are willing to pay: root causes? CEO's overpaying themselves; manufacturing inefficiencies; obsolete technologies and parts.
Example: the Saturn VUE has a four cylinder engine, is rated the lowest in reliability of any vehicle in its group. If you want a 6 cylinder version, you need to get a Honda because the VUE isn't available as a six. (Bob's note here: while this example relates to an SUV which most of us see as part of the problem, you should bear in mind that sometimes a 6 cylinder engine working "comfortably" makes better fuel economy than a 4 cylinder engine beating its brains out. Point is that GM couldn't offer a 6 cylinder because they don't have them in stock ( read: "obsolete parts inventories/management")
5. Related to #4: Cost per unit will have to go substantially below competition's costs in order to win back market share. Hard to do when you don't have a "Prius" in your lineup as a lure for customers.
6. GM is so strapped financially that they cannot afford the research and development equivalent to what Toyota has put into hybrids.
7. GM lost a generation of buyers in the 80's and 90's because of poor reliability and lackluster offerings. Those folks went "import".
8. On Hybrids: Lutz admitted GM missed the boat.
9. On Hydrogen: GM leads the world but the technology is so difficult that this is a moot point. It may take 25 years for the technology to become practical during which time GM may well go broke. By leapfrogging into hydrogen, GM missed cashing in on the mid-step technologies like hybrids, clean diesels.
10. GM is in serious denial. CEO's tend to blame predecessors for problems, citing health care, previous contracts with UAW, previous decisions without being willing to acknowledge that GM products in general don't match up with competition. Corporate governance and accountability is atrocious.
11. Related to #10: GM spent two billion dollars acquiring the first half of FIAT, with the option of buying the second half later; decided that it was not able to ressurect FIAT, so spent two more billion getting out of the deal. BAD CEO decisions.
12. GM board sucks. No accountability.
13. GM made 100 billion in truck sales over the last ten years, the only serious inroads it made against the Japanese. Instead of investing in viable products people needed, they invested in gas guzzlers "candy" which people wanted, but which the economy could not sustain. Had they spent half of this money on research instead of lobbying Congress to protect their profit structure in SUV's, they might not be in their present situation.
14. GM needs a few "hot cars" in the mid market, e.g., like the Chrysler 300. Some Cadillacs, the Corvette and one or two other models are world class, but most of their lineup is too vague.
15. We've "buried" the BIG 3 several times already, so we should be careful about doomsday scenarios. Chrysler recovered from bad leadership, etc., although two of the speakers wondered how GM would do the same given the above issues. Consensus is that GM is in really bad shape and will be for several years.

Guests: Jason Stein of Auto News, Sean McClendon of Auto Research, and others whose names I didn't get.

Bob