Autoblog Link

Things aren't quite as rosy in GM-land as we thought...

 

This is exactly what I've been saying foe some time now and I get blasted for it almost every time. It's obvious that GM thought the LS series V8's would be good to go nearly as is for a while longer than they actually will be and they were caught snoozing a bit. Couple that with a brand portfolio that still does make any sense, and this partially due to errors on GM's part, and in more than a few ways Ford is looking at a rosier near term than GM.

 

How does this have anything to do with the LS series engines?

GM President Frtiz Henderson came squeaky clean about the state of GM's brand portfolio, hurdles and losses. On the issue of too many brands, he admitted that the reason GM still has so many is that it is simply too expensive to kill any one of them. GM spent almost a billion large putting Oldsmobile to sleep, and with The General coming off a $3.25 billion Q1 loss, every half penny counts. In the mean time, GM will have to make do with its four new brand czars. Henderson and CFO Rick Young also admitted that sales projections could be described as "rosy," the word "Delphi" is beginning to rhyme with "albatross," and that the intergalactic rise in gas prices has changed consumer buying habits "faster than we thought."
Fritz summarized the situation with: "We have to adjust. We have to learn how to make more money in cars and crossovers and tighten our belts with regard to cost expenditures." That's not the writing on the wall, that is the wall itself.

They are talking about killing marques not engine lines, and about making more "profit" on cars and crossovers which very few carry anything LS related whatsoever. In terms of cost, the LS series is a much cheaper engine line than the rest in the fleet. I'm sorry if you feel like you are getting blasted but I'm still trying to corelate the logic of losses caused in big part to GMAC, Delphi, and the strike along with having multiple brands that cost alot to put to sleep, with your statement above.

Near term is Ford looking at rosier term than GM possibly due to trimming of the fat ,which GM needs to follow suit with I agree, the absence of a huge strike, and the faltering of GMAC vs Form motor credit. Delphi is another huge thorn. On anything else there is no "rosier" look.

1.45 billion hit from its 49% stake in floundering GMAC. The two-month long American Axle strike also cost GM about $800 million, while further support of bankrupt supplier Delphi's restructuring took $731 million from the corporate coffers.

Says most of it right there.

Most tend to forget this line here in the autoblog article.

"but GM's performance in the area of actually selling cars wasn't as bad as analysts expected"

 

Where did it say that in the Autoblog article or am I misunderstanding you?

 

That line was pulled from the actual loss article, http://www.autoblog.com/2008/04/30/g...on-loss-in-q1/, not this particular article, although it directly relates to it and a major cause of the shift.

 

Ahh. OK.

 

This doesn't cover the LS series V8's, but I found one particular comment in the linked article very interesting and I'll put it forth as one example of where I made claims regarding a problem within GM, ending up in an online slug-fest over the same, only to be vindicated now by exactly what is in this article.

That problem? I said that GM wasn't making much if any money on many if not most of it's new cars. I also said that designing the Zeta platform in Australia was a serious mistake because, while Australia is good at developing rwd platforms, the downside is that they are good at developing high content/high cost rwd platforms. I further pointed out that delays in Zeta related rwd programs were almost certainly related to the same based partially on a simple strategy of connecting the dots and partially on rumors that Zeta was running over budget.

Now we have a new GM exec saying....."We have to adjust. We have to learn how to make more money in cars and crossovers and tighten our belts with regard to cost expenditures.". This probably should go without saying but if Zeta based cars were going to somehow reverse that trend you can bet your bottom dollar they would have talked that up in some fashion because in the end that is what corporate talking heads do. This brings us to the cold reality that, If Zeta isn't being presented as part of the profit solution, then you can bet your last dollar that is because Zeta is part of the problem. Even more, if Zeta wasn't part of either problem, and was in any way shape or form a solution to either, Zeta based programs wouldn't have been postponed and/or canceled.

As for the problem with LS series engines, the following couldn't really be aimed more directly at much else. 'and that the intergalactic rise in gas prices has changed consumer buying habits "faster than we thought."' Some may be tempted to point their finger at BOF trucks as the target of this comment but the reality is that the issues created by a dependence on BOF trucks is old news now and GM is already knee deep in a plan aimed at bolstering sales through cars and crossover suv's with V8-powered rwd cars playing a relatively large role in that change. We've already seen more than one rwd car program put on hold and an entire V8 project...Ultra....canceled. To be fair a decent portion of the problem with GM's V8 lineup is that they simply haven't done enough with smaller sized/smaller engined cars to offset the fuel consumption of the same, but in the automotive world no program is an island so this shouldn't be a surprise.

I'm not here to go out of my way bash GM but I wont pull any punches to make them look better. IMO a lot of the faith people place in GM's recent and current product plans is misplaced and, and since I can't stand the thought of en entire community of online enthusiasts asking how GM could have gotten into these dire straits three years from now, I feel compelled to say something about it. Actually, at one point I even believed GM to be on a sounder path than Ford but that changed based partially on things GM has done and partially on market and regulatory shifts GM has no control over. For me this stuff is obvious and I would argue that, as more details leak from within GM, virtually everything I've stated about the situation at GM is proving to be true.

 

Hold up bro not exactly. I get your point but the earlier debate and this are not linked at all.

OK. Here the first sentence is correct as quoted above which I never disputed. The Zeta mistake was your opinion then and continues now and this does not indicate in the slightest any type of vindication on your behalf about it. You read that article on the loss where it shows the numbers. The only place GM is not profitable is in the US. Outside the US sales are up marque wide. I admitted it then and the cold hard facts back this up. GMNA cars are not profitable in the US. This loss and shift of focus, which is nothing more than appoint 5 people to 200K+ paying jobs (dumb), has more to do with current US sold cars and crossovers only (trucks are not mentioned take note of that). Furthermore comming to this notion has nothing to do with Zeta profitability in the only nonprofitable GM market, the US domestic. As until last month no zeta vehicles were made or sold in the US so it can't be included. Period. In otherwords Zeta has nothing to do with anything in this article whatsoever. Reread it if you doubt it but you cannot prove otherwise anywhere that the Zeta platform has anything to do with last quarters loss or this czar junk. I linked where the biggest hit was, it is right there.

Again Zeta is still going as planned. If Zeta was part of the problem the term RWD would have most definately have come up. It hasn't nor will I suspect it to anytime soon. The plant is still undergoing construction and the drivelines are being tested as we speak.


Ultra never had a serious go from the jump. Just line any other brands concept, it was a concept which after serious thought was applied, it was cancelled. Ford has had just as many cancelled long before birth and it does not mean anything. It happens just about monthly in all marques. The truck issue has more to do with it being a 5500+ blunderbuss than it does the engine powering it. Ford is feeling the same woes in the exact same scale. Don't even bring in the twinforce into this again as I bet the 4.4 diesel sees more action in big trucks, like I said in our previous engagement, than the turbo DI V6. It is more efficient and with the new focus on biodiesels, diesel is the new thing and gaining more support than DI or turbos or both combined. I have said it many times. I'll state it again here.

Back on point though. Again for a V8 the LS is just as efficient as any similar v8 in any other marques truck if not more according to the NHTSA report I posted a while back prooved. Reguardless of the drop in sales in trucks they still remain the main profit getters for both Ford and GM and are not even made mention of in this or any other bulletin other than a drop in sales which this has nothing to do with. Profit is key here for this discussion and the reason for this thread, not sales. It just means they cant justify earning small profit on cars letting the trucks have the lion's share because the public is going to be buying less trucks and SUV's. That includes every truck and SUV on the market.


Bro, what you assail is not akin to not pulling punches. You have an obvious dislike of anything GM and rose colored glasses for anything Ford. I have seen it and kept quiet about on many threads. It is extremely obvious. Many more have noticed it and I am not just talking about your arch nemesis either. In my time on this board, as well as others I have seen you on, I have seen it said by quite a few (me, BC, and scottyboy excluded here). You cannot say the same counter. I own both Ford and GM vehicles and honestly have given much more money to Ford than I have GM by purchacing 3 brand new Fords straight of the lot. All of my GM's were bought used. Even in other boards anything I say against ford is usually in jest or the butt end of a joke which I have zero problem with both ways.

I invite you to read this entire article from one of your own sources. http://www.autoblog.com/2008/04/30/g...on-loss-in-q1/
You get a better picture of what is really happening. And here is one of their solutions http://www.autoblog.com/2008/04/29/g...lignment-plan/ which I personally think is dumb.

 

Your still thinking in in terms of what has happened and not in the terms these guys are really talking about which is what is going to happen in the near term. These guys might be talking about profit and loss issues that happened in the past but when they talk about profitability they are talking about what their portfolio looks like right now and in the near future. These guys are discussing their inability to make a profit on cars in the present tense, and that means that all the new stuff is covered.

I never said Zeta wasn't going forward, at this juncture Zeta is too far along to simply axe even if GM wanted to, but the scope of the program has been trimmed with postponements and cancellations. Even some of the folks who like to beat the GM drum as much as you have stated that the tightening CAFE standards excuse pedaled by Lutz was surprisingly lame since, while it will obviously affect near future plans, GM should have more than enough time to work around these issues within the next four or five years if there weren't fundamental problems with the programs themselves. Don't get me wrong, I'm not saying fuel economy has nothing to do with it, but the real reason was obviously GM's fear that in the here and now they wont be able to sell enough of these large, heavy cars in the current climate of higher gas prices to support a program that is already over-budget.

Ford is feeling the same woes in the same scale as it relates to outgoing product, but it's plainly obvious that they are better prepared for the current climate of tightening CAFE standards and higher gas prices. The difference between Ford and GM is that the general is taking V8 programs off the table while Ford is reviving them. The plausible reasons for this are obvious and are in no way good for GM.

Actually I don't disagree with most of this. But unfortunately for GM it's pretty obvious that they are further behind with regard to smaller, more fuel efficient cars which would allow them to continue building trucks in the volume that they want and need to. I said earlier that the problems surrounding GM's V8 offerings have many mothers, that hasn't changed.

Please. I seriously doubt anybody whose opinion would actually matter to me is included in this 'list'. The real issue here is that I'm right and I always have been....you just don't like what I have to say. And your accusation is just disingenuous as I've criticized Ford on several occasions. I don't go that route as much as I otherwise might because, for a Mustang forum, we have a surprisingly high percentage of folks who do so regularly anyway so I don't feel the need to pile on.

 

Did anyone see that the UAW strike at the plant that cranks out Malibu went underway today at 10:00am EST?

GM just can't catch a break and the labor unions are too stupid/self-centered to realize that they're essentially cutting their OWN throat by taking such action.

 

Again assumptions, What are they really talking about? Quote something, anywhere about this especially in reference to "upcomming" lines not current ones. They are talking about current lineup. No one anywhere has any inkling of what Zeta NA holds. It hasn't even produced one vehicle yet. When it gets up and running and the same thing is said after that fact then I will personally say you were right and I was wrong. At this venture, though you are speculating the profitability of a chassis that has yet to be built and none of the 3 vehicles slated for is thus far have evee had the first piece of sheet metal placed. No one can comment on the Zeta portfolio because it's main NA vehicle will be the Camaro. After they hit the streets and they see what they are selling then deductions of profitability can be realized until then there is no possible way of speculating it's profit shares, they can't even state that yet mainly because the price for the Camaro is not even announced, nor the G8 ST thing or the other vehicles that are gaining more steam as possible Zeta vehicles. If you don't have a product built yet and have not even set a price on you there is no way to deduce it's profitability. It is less than 5% of a global market and 0% of the domestic market as of now.

Bud you cannot find a thread here where I, "beat the GM drum" in here. Anything I have disagreed with you is less about what I think about GM and more about inaccuracies or misassumptions by you of situations associated with the automakers both GM and Ford. Every time I disagree with you in a thread it is because I know of things that run directly opposite of what you assume and will post them up. If you were to post up something in black and white then there is nothing to debate and nothing I can or will even try to counter. However when you take a headline that amounts to losses realized and made an assumption on LS series engines being the root cause and include future develompements that have very little set in stone along with it. They don't know what they will be able to sell of the platform yet, in what capacity. The G8 just went on sale and the numbers are not even close to being in.


Plainly obvious? OK tell you what site credible sources other than yourself that state this in black and white and not on assumptions. I don't want an article or product that may or may not be realized. I want to see in black and white this quote, "Ford is better prepared for the gas price shock or CAFE" or anything along those lines that specifically state this, from someone who actually knows what is on the table for both. Do that and I will concede. Do it not, and I will continue this debate. GM is taking V8's off the table? OK I'd love to see your source for this. I don't want your assumption I want to see a credible source siting GM taking V8's off the table. I know for a fact they are in constant state of revival and refinement.


Again personal assumptions, site any professional reference reguarding this. It has nothing to do with being behind on anything. The smaller more fuel efficient cars just do not bring in enough money to offset the losses they are accruing. If the UAW strike and Ford Motor credit hit Ford like this they would be singing the exact same tune, however instead of huge plunges Ford got a boost by the selling of acquisitions helping to trim alot of fat, something GM desperately needs. That is the only advantage I can and will cede to right now even though I never did anyway. Again the problem lies not with the V8's themselves. They are in line with any V8 program out there past present and future.

Wrong. You weren't right then you aren't right now otherwise we would not be having this debate now. It has nothing do do with whether or not I like what you say. It has everything to do with I know you are incorrect on many things and are assuming points which have no factual basis and are based off incorrect inferrances. You prove what I asked for then on those topics alone you "might" be right if you provide supporting facts to back that claim. But then just as now you cannot 100% proove your point even remotely and cannot possibly proclaim such a bold statement as that. As with politics those who profess to be right as much as you are are never as "right" as they claim to be, there is no difference here.

 

Yes it and they are retarded.

 

Isn't that what this is really about...? C'mon, be honest, now...you're always right in your own mind, right?

Fact is, it ain't over till the fat lady sings - and she ain't sung aria yet, slim.

 

What are they striking for? I thought GM hammered out a good deal with the union, or is linked to the AAM strike?

American Axle provides axles for GM, AAM wanted to cut employee pay and benefits by about 50% (IIRC), I know everybody likes to trot out the "we need to be globally competitive", but thats a major life changer and makes for sour grapes when your big boss has gotten a 400% increase in pay compared to the wimpy 20% increase over the same time before the 50% pay/benefit cut comes in.

 

Gone for a week and the place runs amok. The problem with your theory Hollywood is that when I cast stones at the General's plans it's done with ample cause..

I said that Malibu was a good effort which would ultimately disappoint for the same reasons the Five Hundred did and the Taurus has. Now in the midst of the summer selling season we have the Malibu's best ever month of 17k units moved, and this only having been accomplished with 1k dollars on the cars hood. This jives with what i said would occur perfectly.

I said GM was obviously losing money on several important new platforms, and now we've seen in this thread an article containing an admission by GM execs that this is indeed a problem.

I said that GM, and GM power-train in particular, obviously wasn't as prepared as they needed to be for the changing market (gas prices/CAFE) and yet again in this thread we've seen an article where GM execs admit to exactly that.

The fact is you're going to have to look really closely to find where I've been wrong as it relates to GM since virtually every press release from the General validates something I've said. As for wanting attention. My concern is that so many still run on babbling endlessly that what GM is doing right now is going to save the company. In truth it may keep it from going under completely, but what GM is pumping out right now, and what they apparently plan to pump out in the near future, ain't gonna' be the long awaited salvation of anything and that is just how it is. People deserve to know the same.

 

I, I, I, I, I ... Jesus!

I hope you didn't pay too much for that crystal ball you're relying on.

 

It's gonna take time for Malibu to start competing seriously with Camry and Accord. Last two generations of Malibu had a horrible reputation and usually ended on the rent-a-car parking lot. You can't expect that people will change their opinions about Malibu overnight.

 

Well, I really can't complain since the d*** thing is working so well.

Actually, when a car is truly successful that is exactly what happens. Look at the 2005 Mustang, or the 2005 Chrysler 300, or even the current Focus. All of these cars enjoyed immediate or near immediate success because they offered the consumer a compelling reason to switch, each in their own way.

The Malibu is a Chevy Accord which begs the question, why wouldn't you just buy the Accord? The Chevy is about the same price as the Honda and offers a driving experience not that far removed from the Honda, but falls down elsewhere with resale value nowhere near as good as that of a Honda and reliability which many potential buyers are going to reasonably assume is suspect. It is also worth mentioning that the car is sold under the umbrella of a brand which has a tarnished reputation to be kind. Even the styling, which isn't bad, is appropriately mid-America bland and doesn't do much to set the car apart from the crowd.

I see absolutely nothing compelling enough to pry somebody out of their Accord or Camry. Ford and GM are to the point where their cars have to be better than the competition if they want to make any headway within a reasonable span of time and the Malibu is taking an entirely different approach to this problem simple seeking to be as good as the competition.

GM needs a lot less of the Malibu approach and a whole lot more of the CTS approach throughout the brands if they want to make serious headway.

 

Yeah, but it's not like Mustangs built before 2005 were crap. And Chrysler 300M had a pretty good reputation before 300(C) came out.

On the other hand, Malibu in the past 10 years or so was a crap.

There are also other reasons like Mustang and 300 had barely any Japanese competition. Mustang didn't had any real competition from Japan and 300's only true Japanese competitor is Toyota Avalon. Malibu's competition are Camry and Accord which have really good reputation in the USA.

 

Yeah, about as well as a snow globe.

I think you got gipped.