I was thinking, why would GM give a press release stating they are canceling the Zeta? What purpose would this press release serve.

Investors and customers dont care what the cars platform name is, they just care if it sells/looks good.

In other words, if they were not going to use Zeta and are now going to use Kappa (or whatever), why would they tell anyone? Neither the customer, nor the investor cares.

Canceling ANYTHING is considered bad news, especially after the previous weeks announcements.

Is GM trying to drive the stock price down?

Ken

 

I was well known throughout the industy GM was to use Zeta for anything from sedans to sport coupes . It was a major announcement that they would no longer be pursuing Zeta in NA as it was the projected basis for all thier up-coming RWD products . It was also known that there were major manufacturing differences between AU and NA that could not be overcome in a cost effective way . Their press release was truth , and a good thing for NA GM has mostly likely known this long before the official word went out and already have a plan for GM's NA RWD chassis .

 

Could be ... like protecting against the avalanche with well placed detonations.

Might help with long term negotiations if the passengers think the boat is sinking. Probably help with negotiating for longer term fed/state/local tax incentives as well.

That's the sympathetic audience in a capitalistic system ... consumers/investors go somewhere else.

 

Funny, I was thinking of something similar myself.

 

i believe, with absolutely no evidence, nor sources, that GM has canceled it. BUT it doesn't matter. the research is there. they could just as easily make another platform/frame. I also have so much faith that i believe GM is going to build a platform just for the Camaro and allow other cars to use it, instead of it being vice versa. If this is true (which is all speculation) then alot of people will look pretty stupid with the GM slandering.

 

On the contrary on every account, Ken. Stockholders expect details as to what any company is doing. GM is dutybound, like every corperation to keep stockholders and investors up to date on the condition of the company and new products or setbacks. Cancelling Zeta certainly qualifies.

The only restrictions on what can be said are on items that are developed in secret for the market. However, once something comes to the surface (GM announced their plans to produce a series of RWD cars based on the Zeta chassis about 2 years ago), if there's any changes or delays or anything that may adversely affect their stock value, GM can get into alot of very serious trouble if they don't reveal this to stockholders.

That's one of the key reason why automakers have press releases, and why press releases are completely honest and trustworthy.

If you have any further questions or doubts on this, see "ENRON"!

 

There is another obvious reason that you're missing. During labor negotiations it is always beneficial for management to paint a picture of doom and gloom. Make things look bleak, and labor is bound accept less than what they're asking for. If everything is rosy and you're rolling in money, labor is going to ask for and expect the moon.

Think about it.

 

Not if it means your credit rating is going to tank and your stocks move to junk status.

Also if GM, like any corperation, produced false information regarding their finances for purposes like you describe, not only would they face substantial fines, it would also qualify as fraud, opening them up to investigations from not just the Labor Department, but also the Securities and Exchanges Commission.

Sure, in labor negotiations, a company will downplay as much as they can. But they aren't going to wreck the company via fines, increased borrowing costs, decimated stock prices, government investigations, and possibly jail time for certain employees involved (let alone the ill-will with labor unions) with such a scam.

There's a reason why what you describe has never happened before.

 

So....don't they have to tell us they are developing a new Camaro then?

 

I'm not suggesting they make false allegations. I'm saying don't hide anything and play up the negative while holding back on the positive. The worse things seem on the surface, the better it is in negotiations. I'm also not saying GM is doing this; however I am saying it is done in business all the time.

Has it happend before? Yes, I know a place where it is happening RIGHT NOW. (Not GM.)

 

Seems to me they would have written something like this....

"GM has decided to not use the Zeta platform in the North America market due to profitability concerns. This will delay the introduction of some RWD vehicles, but GM will continue developing RWD vehicles with a yet to be determined platform."

OR

"GM has decided to concentrate on the rapid development of upcoming new vehicles. This will cause a delay in the development of RWD vehicles that were projected to be released in 08. Another reason for the delay is that it was determined the Kappa platform could not be profitably made for the North American market, so other platforms are now being considered"

My press releases are much more upbeat, putting the positive before the negative. Plus I give vague details such as "delay" and "considered".

They have pros that make these press releases, seems like they could come up with some better BS than me.

Ken

 

In that case, sure it's happened. But not to the extent where it hurts stock prices and creates the avalanche of negitave press that's happened so far.

http://www.detnews.com/2005/autosins...A03-136261.htm