GENERAL WATCH NEWS
The Cause

Imagine...As the Rothschilds financed both sides of the Civil War, master capitalists, after giving their backing to the Japanese, use the invisible hand to guide GM softly down the stairs of diminished share. As GM becomes weaker, the foreigners invade our shores, setting up their fortresses of non-unionized production. Meanwhile, the ever-increasing costs of organized labor are halted by fierce competition, and a massive media campaign against their portrayed unrealistic demands. The tide of improving standard of living for the masses is halted, and through the might of popular opinion, concessions are wrought. As unionism is weakened, the purse string holders win on both sides of the game. Record profits for the invaders, and lessened expenses for the domestics. The demise of old time factory towns, who suffer setbacks in jobs and tax revenue, is a minor side effect of the intended outcome. The remaining relics of the battle for recognition are forever eliminated from the landscape...

>From Friends:
Look at where money has been, and not been, spent and some patterns will emerge. Product and promotion must be funded. Declining sales "justify" the demise of the product. With Oldsmobile, the final straw was the "no front bench seat" for the last generation Aurora. When that omission was questioned by the media, it became a "management decision" and nothing else. Was that "management decision" due to some hidden agenda or just ignorance of some younger marketing types? It became somewhat clear just "who" or "what" "Management" was, and why that decision was made. It was not made to specifically attract new customers, as few new Oldsmobile customers probably came into the fold back then, but to begin a chain of events that ultimately led to the demise of Olds.
Ask yourself, was Olds that poorly managed, or was it closed intentionally?
The current strategy just announced of MINImizing divisions is disastrous, and only illustrates the intended demise of not only nameplates, but divisions. There must be a reason, and it may well be to eventually operate factory owned brands. Buick has been starved and allowed to die in the market. The constantly shifting slogans, (ie. Spirit of American Style, One Better, Dream Up, and It's All Good) only prove the lack of leadership and direction. Why does the American Revolution campaign feature an oriental symbol in place of the E in Revolution? Look at the Korean flag and compare. It's actually quite amazing dealers have lasted as long as they have, clinging to existence without any life support. It's taken some seriously coordinated efforts to "kill" the foundation stone (The Buick). I'm quite sure the next move is pulling the plug when half-baked new models "fail".

The Case

Roger Smith was nowhere near the disaster that Rick Wagoner is. Roger brought us the "Lulu" of Hughes and the talents of Perot. He introduced Saturn, and made the tough calls. His biggest mistake was automation instead of human relations. Still, I believe history will see Roger the Dodger as far superior to Wagoner the Whiner.

Under the leadership (?) of G Richard Wagoner, General Motors has sold, or spun off:
Delphi,
Raytheon,
Oldsmobile,
New Departure,
American Axle,
EDS,
Hughes,
Detroit Diesel,
GMI,
Electromotive,
Light Armored Vehicles,
and more!

In replacement we have:
Fiat Fiasco (over $4,000,000,000 WASTED!!!),
Junk Bonds,
Daewoo,
Shanghai (may work?),
No innovative Buicks,
Disastrous marketing,
Enormous Long Term Debt.

Also:
Lost over TEN POINTS of US market share,
Lost over 50% of company market value,

In Japan, they fall on their sword for any of these failures individually. When added together, the REAL question appears. Who is his BIG FISH supporter? Hardly anyone questions THE BOARD. Who there is responsible for Wagoner? Is it the same board member who brought us the disaster of the PHONY Ron Zarrella and his failed brand marketing? Who is behind the board? How far does the trail lead, and what is the reason?
I began asking these questions after meeting with GM executives many times and seeing their resistance to A Return To Greatness, a complete marketing campaign to regain domestic market share. The Plan calls for virtually no investment, and will, in fact, serve to significantly reduce expenses. The specific steps are based upon decades of success as America's top Buick salesman (six times) and have been effectively implemented at various dealerships where I served as General Manager. Two weeks ago, I released the first twenty steps of The Plan. Here are various sample responses from across the country, and throughout the industry. These remarks are from dealers, Wall Street analysts, marketing research companies, GM employees and retirees, and members of the media and academic world:

"Just read your plan to Return GM to Greatness. It all makes sense, but how do we get the brass at GM to pay attention?"
""Everything makes perfect sense in its appropriateness and simplicity."
"You certainly make an interesting proposal."
"Keep up the positive pressure."
"I will gladly put your name on my proxy".
"Wow, Jim, this is amazing. Some of these ideas might just work, by God. And Mark LaNeve dismissed this?"
"I have looked at your website, and there's a ton of interesting stuff in there."
"I would like to see more".
"I have read with great interest your twenty points and feel they have tremendous merit to the GM organization.".
"I loved your ideas in 'The Elephant Can Dance'."
"I like much of what you have to say about trying to 'fix' GM's many problems".
"Thanks for keeping the heat on GM's management".
"It is a blessing to hear your thoughts about GM. Being a Nissan dealer, I have watched the company do a 180 turnaround because of vision and dynamic leadership...in just 5 years."
"I visited your website and found it great! I learned a lot about the GM I used to work for".
"I believe you touched on the issues that truly need to be addressed...very good insight to the marketing problems...let's see if they take these suggestions and act upon them".
"I agree that it's time for the GM board to get their heads out of their butts and start paying heed to guys like you".
"It's nothing short of terrific, and if there's a brain left in Detroit, they'll listen to you. One of their major problems is simple arrogance...we know everything better than you do."
"It was very interesting to read your well thought-out ideas. Those twenty points are very detailed and very specific, which is just what the doctor ordered."
"Frankly, your twenty points could not make any more sense".
"You are on a mission and I hope you can make a difference".
"Good Work Jim".
"You have the answers to the problems at GM".
"I think it is the best thing to have happened to GM".
"At this point in time I was hoping the General would try something that would help it out and with your plan, I think they can, as you say it, 'Return To Greatness. You cover everything that should be changed, and do it without anything drastic like cutting a division or filing for Chapter 11 to 'rid' itself of the UAW."
"You remind me a little of the legendary Ed Cole."
"Thanks Jim. Many of these make a lot of sense to me".
"You are not only gathering the support of stockholders, but have also been wise enough to tap into the GM customer 'fan base'. This could be huge, to say the least."
"Great work Jim. I'd write on praise and ideas for hours, but you've probably got a lot of other work to do".
"It's very nice of you to be so open about your ideas and to ask for criticism--it's refreshening."
"First of all. let me say that I think you're doing everyone a great service. It's time the public was heard."
"I didn't focus on the loss of so many GM assets. When put into a list, the shrinkage is staggering."
"I truly enjoy reading your views."
"Either he (Wagoner) is exceedingly stupid, or he's being paid to see to GM's demise".

To receive your own copy of the first twenty steps of A Return To Greatness, please send your email request to:

Buickman@GeneralWatch.com

Jim Dollinger
Founder
GeneralWatch Shareholder Newsletter
www.GeneralWatch.com

ref. http://www.autonews.com/news.cms?newsId=12301


Letter Number One 25 May, '05


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Rumor of GM discounts for everyone. These marketing people have no idea the damage they are doing. Resale values will drop quickly, destroying future residuals. How will GM employees feel about their privilege? How about dealers that have properly managed their invenotries and business models and must now forego profit? How about the negativity associated with distress marketing? I've never seen a more certain path of self destruction.

 

so basically they threw your plan out the window..

this meeting was just a show and pony type of deal for you guys??

 

I don't believe they ever had any intention of dealing in good faith. The executives in charge of sales and marketing are either the most incompetent group of businessmen in the auto industry or are taking their marching orders from someone with an agenda geared toward a weakened and downsized GM.

 

so cant you get the shareholders to make GM "listen" to you guys..and if no..then why not make it public..be the other side of this..im sure alot of talk shows would gobble it up..

 

I like your ideas. In fact, That's why I am attending the annual meeting in Wilmington on June 7. The shareholders will receive the info and The Plan for A Return To Greatness will be revealed to those members of the media who are there to cover the event.

 

Yes, that's exactly what GM needs, more distraction and bad press from people certain that they and they alone have the solution to GM's problems.
Again Buickman, I do very much like your ideas. I do not however, think they're the exclusive answer to GM's problems, nor do I think that everything GM is doing now is a bad idea. GM does have good people in place now IMHO - especially Lutz and LaNeve. If for nothing else, Wagoner should be recognized for putting the right people in the right positions. I really don't think now is the right time to try and stir up GM's management.

 

why not??? sometimes you gotta burn down empires to creat new rulers..

 

and I think GM's "rulers" really have lost touch with what it takes now a days and it makes it worse..and someone like buickman could be what GM needs..but cus its not thier idea..then its no good..

and to top it off..his plan..its if I remeber what was already done to make GM's rivals more powerful in the market place..and GM should do what is killing them..
am I right Buickman...other companies in the auto industry already used this and now are where they are..right??

 

A Return To Greatness is not mine and mine alone. It is a collaberative effort of many years, and by many people. It is exactly what GM needs at this time, an effective marketing strategy which gives the corporation the time and resources needed to get winning products in the showrooms. The just announced program to start Wed of GM discount for everyone shows just how desparate they are. Since GM has no clue how to SELL cars, they are forced to resort to GIVING them away. To be fair, I do like the simple, easy to understand nature of such a program. The confusion of most incentives is a nightmare. It will be interesting to see how many other "deals" are compatible with this effort. On the downside, it will be a disaster for trades. Late model vehicles will depreciate abnormally, almost immediately. No recovery usually happens after such a nosedive. Once auction values are printed, the damage is done. Down the road this will relate to weakened residuals, negatively impacting leases and increasing significantly the actuarial cost of supported leases. Dealers who have properly managed their inventories will be caught short, assuming success of this giveaway. Also, profits will be hurt as the fixed pricing interferes with the natural balance of supply and demand. The real long term effect will be harmful to all other brand building efforts as the public increases their perception of GM products as generic merchandise, valued only by those who can't afford an aspirational set of wheels. What many fail to understand is the underlying feeling of GM as the brand of choice by those who aren't successful enough in life to drive something worth the price.
I've been traveling to Delaware for years. I've tried telling these folks that their market share will continue to drop without change. I told Lovejoy the 29 pins should read 25 unless another direction is taken. So far, I've not been off the mark, and I'm not wrong now. Read the last ten years annual reports and see the empty promises. Don't be fooled be them now.

 

I think we should leave a group of guys in place long enough to actually see what they started get to market and see how it does. You cannot lead a company, any company, effectively if you keep changing direction and leadership.

 

Agree completely. Wagoner's been there running NA since Lopez bolted. He's been at the top with Smith and on his own for far too long. Remember years ago he forecasted $10 per share mid-decade earnings? When the time arrived, he could only offer, "It dpends on how you define mid-decade." When the Fiat put was forced to be reckoned with, Wagoner proclaimed "We would have won in court", yet he stroked the check for another $2,000,000,000. This ranks with Worldcom and Enron. Where is the acountability? How much longer can he be left at the helm? I can't imagine anyone performing worse. It is the responsibilty of the board to take corrective action and replace this man who has done more damage to General Motors than any person in the company's history.

 

Maybe the board sees what he is doing good instead of bad. He is working on fixing a lot of inherent problems, stuff you and I don't see. I don't think you fully understand the inner workings of GM, I surely don't. Getting rid of 1 or 2 people won't solve anything if the 'structural problems' aren't fixed. I think we are getting in the right direction, Malibu is only 3 years old and getting a new front end, new steering wheel and additions to the interior. That would NOT have happened under the old guard.

I think Buickman is being short sighted and needs to just chill.

 

AND..

the funny thing..right now the perceived quality of the competition makes there cars better in trade in time..

so when the word does finally come down that GM makes as good or better cars as the cometition again..all the rebates and stuff will make them cheap on paper still..

so they will still be in the same hole. people wont buy them when it comes to trade time since they can get more for the other companies cars than GM's..

and is this an actual quote that they would of won against fiat but decided to just give them the $$$?? if so thats pretty messed up..

 

or maybee his 20 points for this company will help alot..

GM makes cars..and no matter what they need to sell them..right??
he is a sales man why not listen to him on how to sell cars and make a profit?