Not contradicting, I just didn't explain it well enough.

By eliminating variety I meant making a standard model that reflects what the division is about instead of multiple models.

For example, Pontiac is the excitement division? Standard Grand Prix model should be essentially the GTP with a 3800 V6. The GTP comp group w/ supercharger (or the new 5.3), along with a bit more visual excitement as the "special performance" car. Meanwhile, LeCrosse would have the SC 3800 standard, but would have it's own engine program and suspension. A paint and appearence package and perhaps a wheel tire combo would be a limited edition high profit margin car.


For the special editions, I use the Grand National and Impala SS as examples. Grand National was nothing more than a Turbo Regal painted black. That's it! The Impala SS was essentially a Caprice Police car with Buick seats, aftermarket wheels, and black paint. At least Impala had a unique plastic grill. All very simple, yet GM charged an arm & a leg for these cars, and people payed it despite cheaper versions available. The special anniversary Camaro SS was another example. Yea, I'm amazed about that too.

As far as options, there should still be options such as stereo, interior materials (leather vs cloth), sun-moonroofs, etc. But when Pontiac or Buick is selling multiple trim levels, they are diluting not just their own image, but also taking away the identity of another. There's also the cost of making the pieces that make various trim levels possible.

In case no one noticed, this particular proposal is the exact same thing GM did to the 4th gen to keep costs in line. However, unlike the 4th gen, GM has replacements in route.

 

What will Wagoner do? Just what any short sighted bean counter would do:

1.) Cut cost out of the suppliers, a good portion of whom are already
screaming and near bankruptcy.

2.) Pound down the the already weary and demoralized salaried work force
for not doing more with less, and in half the time.

3.) Ignore any credible vehicle related advice from subordinates or members
of the automotive press who have any real car sense.

4.) Redirect attention away from his abysmal performance record as a GM
executive, to highlight increasing health care costs and lazy union workers
with lavish contracts as primary reasons for the current debacle. (you
are not supposed to recall flashes of brilliance such as the FIAT scenario)

5.) Manage the company as he has since day one by maximizing profit
margin on a quarterly basis and ignoring the long-term big picture by
starving the product pipeline of sufficient funding and support to
produce high quality vehicles with real pizazz.

Shall I go on? The fellow is simply not suited to continue as CEO and should already be on the outside looking in. He certainly does not appear to be the razor sharp business mind that many made him out to be. (at least he has not taken the opportunity to show it yet) What he is, at this point, is desperately trying to retain his power and prestige by personally taking charge of the US operations. You might think that he would have been in charge of US operations all along now wouldn't you? Where has he been while Rome burned?
If GM is to have a decent opportunity to return to prominence and profitability, the board of directors needs to look elsewhere for a new top executive. Hopefully before this individual completely ruins Alfred P. Sloan's masterpiece. The clock is ticking...

 

Give that man a cigar!!!! I agree 100 percent. Oppourtunity lost. GM does have a similar system in place for custom colors, but only for pickups, and I think currently only operational for the Fort Wayne truck plant. Cost is 179 bucks, a total steal. You have to fleet order at least 8 units, or they will hold your order till they get 8 alltogether, or they will wait a few months and they just go ahead and paint the orders they have for that color, even if it is only 3 units. But easy to do at any GM plant if they wanted. They could charge 500 bucks, people would gladly pay to get a unique ride.

I think GM lack of cool colors is a major problem. GM art and color need a total overhaul. Dealer ignorance and laziness is another problem. Example local pontiac dealer, orders one 04 GTO, black with red int. He still has it on his showroom floor. He orders one 05 GTO. Guess what color, black with red interior. He still has that one on his showroom floor too.

As far as the SSR, I thought they were hand built, they certainly look it in person, the panel gaps and trim fit are different for every one, some are downright terrible. But since they are hand built it seems like every one could have been painted by hand a different color with no incease in effort?????

Since we are talking about the SSR a bit here, I must give props to GM for fixing its two major designed in flaws of the MY04 when they made the 05s. They gave the car the ***** it needed with the new powertrain/ 6 speed, and they put two gas struts under that needlessly heavy 200# steel hood. Too bad dealers dont order the 6 speed, and too bad they cost so darn much.

Laziness and ignorance and incompetance are rampant at dealerships. GM needs to have strict schooling and training for the sales managers and salespeople, and get rid of the old school Joe Verde and worse tactics that are driving people to Toyota dealerships in droves. I am cutting my own throat by giving this advice, since I sell Toyotas and Chryslers! But GM needs to get more involved in what the dealers do, since that is the face of GM that the customer deals with. Oh and by the way, dont make the dealership pay 75 bucks for each training module for each sales person the way DCX does, cuz dealers are cheap and wont pay for those modules. Toyota does it the right way, TONS of foundation and product training, and its all FREE for the dealership and the salesperson. I can give you the real world results, our sales people know a lot more about Toyotas than they do about Chryslers, and as a result we always SELL at least 4 times as many Toyotas as DCX products. So far this year the ratio is more like 8 Toyotas for every DCX.
We know our product, believe in it, dont grind the customer, and you would not believe how customers respond, most pay full retail, gladly.

Even Toyotas have rebates, but most Toyota customers never ask about them. Its just a pleasant surprise when they see the numbers and get a rebate. It helps tho that most Toyota customers are repeat Honda or Toyota or Subaru buyers, and as so are not upside down in thier old japanese trade in.

A rebate is a godsend to a salesperson of an American car in 2005, they help you help the upsidedown American car owner BIGTIME and get a deal done. IF GM gets rid of rebates before changing the quality, resale, reputation and PERCEPTION and of the cars they will guarantee thier own doom. Market share is down this year to 25 percent in my opinion cuz they have done nothing but cut rebates all year. Great idea in college biz school class, but in the real world, keep getting rid of rebates, and I guarantee 20 percent market share by the end of the year.

The car market is way different now than it has ever been, and GM needs to accept the new realities and make the best of the hand they have now. Even Saturns dont sell anymore with a no dicker from MSRP policy. Some have as much as 4500 in rebates. People need rebates to get the numbers to work. Used American cars are in a free fall in the resale market since September 11th.

To close, I say to GM, just follow the exaple of your old business partner Toyota in any way possible. They will gladly teach your everything they now know, since in the 5 years it will take you to implement everything they will have kept moving themselves forward slowly but surely and still will be light years ahead of you Grasshopper/GM. But you have Toyota as an example, they have done all the hard work, use what they have learned. You will still be overtaken by Toyota, but hopefully you wont be overtaken by the likes of Kia/Hyundai.

 

To cut off the uninformed that would say, "but the GN and Impala SS had special engines!": This is not true. The Turbo 3.8 V6 was available in the Regal and called T-type. The LT1 was an uplevel engine on the Caprice.

Randy

 

I still say it's PRODUCT.

There is NO WAY you're going to unseat the Japs in the plain jane family sedan arena without REVOLUTIONARY design, i.e. Chrysler 300. Ford just found that out with the dismal debut of the 500. They can't figure out why just offering the "equivalent" (underpowered at that) doesn't just suck the masses in. I can buy a 280hp 5spd auto Toyota Avalon for around $25K. Why on earth do I even have to bother looking at a GM or Ford car? The 300 will make me at least go over to the Chrysler dealer.

If you want to talk sporty. Say for example Pontiac as the sporty division. Well then let's get off the sh*tter and do SPORTY. Real performance under the hood. Every Pontiac from the G6 up gets a 260hp+ 3.6 with manual or 5 spd auto. The sheet metal is OK, but stick big honkin 17s and 18s standard. Give em some free flowing exhaust growl. But try taking THAT package to the beancounters. They'd keel over.

Advertising, gimicks like onstar, and straightening out pricing are all fringe easy stuff. It's going to take some money and guts to put products out that'll turn the tables on the Japanese.

 

OnStar = cell phone =
The Geriatric (sp?)option of choice..."I've fallen and I can't get up"...it's OK mam, help is on the way...

All in a single sentence....Listening GM? GOD I HOPE SO....
(See where all that secrecy CRAP is getting them...they need PA, "Procrastinaters Anonomous" )

 

Than You!, me too, face it most of it's "Dated" by todays standards...even with new "skins" the underpinnings and drivetrsains are "Dated"...

 

Very interesting point about the rebates; one that hasn't been thought of in these forums. I had bought into the "rebates are bad" ideas floating around here totally, but with this new piece to chew on, I may have to rethink.

But what to do to get out of the quandary? With rebates, the stickers need to be sky high, don't they? That money needs to come from somewhere.

And since we were using the SSR as an example, I'll continue using it. I looked at three; all stickered over $50K. It simply isn't a 50 thousand dollar car, the perceived value is just not there. Stickering determines what class of vehicle the public compare it too. If you sticker it at 50, the public compares it in their own minds to actual 50K cars! And the SSR comes up a loser in that comparison. The SSR actually is, or should be, a $35,000 car. Its a winner at that price point. After the rebates and dickering, maybe it really sells for 35K, but not after many (myself included) backed away gasping at the initial contact.

Another opportunity for an impulse buy lost! Again!

BTW, I didn't recoil in horror because I couldn't affort it - I can - I was scared off because anyone would be a fool to pay that much for that car. This is a shame because before it was introduced, I eagerly awaited it. I wanted one (and kind of still do). But, the execution was poor. Too heavy with too little interior space for as big a vehicle as it actually is. Your point about GM fixing the driveline problem is a good one though. Anyway, back to the rebates -

So what is the answer. If buyers need the rebates to get their heads above water, and the stickers are way out of line, that leaves only that the used values must improve, but how. This smells a lot like the root cause of the problem. The high dollar imports get away with high stickers on perceived value and HIGH LEASE RESIDUALS. So what to do, what to do, what to do????

Sounds like the only long term successful option is to build only world class quality cars with styles that make them "gotta have". Where have we heard that before? I know, easier said than done.

 

Someone mentioned the idea that Wagoner's list of things to do will include getting more money out of the suppliers as another bean counter idea that'll fall out of the change in direction. Wagoner might think that, but:

Not going to happen.

The supply base has had it. I know of many, many companies who have plainly stated:

"Not one cent more, and if you try and take it, come get your tooling."

Oxford, Tower, Citation, Intermet, Federal Casting, etc... all bankrupt. The universal feeling of the survivors is becoming:

"We've done our part, and we're not going under for GM."

If GM believes they are paying more for a given supplied component than other OEM's they have one company to blame - GM. None of the nonsense spouted by Purchasing (mostly reluctantly) is going to change it. GM is GM's own worst enemy where component costing is concerned. Late changes, bad direction, poor engineering skill at the Design Engineer level, poor engineering management, etc...

Things will never get better with their suppliers from the cost end unless GM changes their perspective to the following statement:

"I, as General Motors, am entitled to a world-class product. You, as the supplier, are entitled to a fair profit. We will work together to satisfy BOTH conditions."

The supply base is moving it's best and brightest AWAY from dealing with GM. You put your best products and employees where your future is, and unless GM changes it's tune in a big hurry, they aren't getting either.

This isn't emotion.

This isn't the supply base whining about GM yelling and screaming at them during a meeting or treating them "badly" personally.

This is about MONEY and where the supplier's investments make the most sense. As of right now, it makes no sense monetarily to put any effort at all towards GM business.

 

Wow.

So GM's attitude of their power because of it's volume purchasing seems like it's going to backfire?

 

Yes most 04s seem to be advertised now from 30 to 33K. Still plenty on dealer lots at that price that are not selling. I would say that you would not get hurt abnormally resale/depreciation wise at that price, so maybe that is a proper market price for that truck. If you offered a sales manager 28K for an 04 I bet he would gladly take it to make it go away.

Yes you are right about the rebate catch 22, and value (quality, durability, reliability, styling) for the MSRP price is the only way out that GM can control, since fuel prices and the economy cant be. Another plus for high sticker prices and big rebates that I did not mention before is for weak/bad credit customers, the bank looks at the deal with the bigger down payment(rebate) to MSRP more favorably. Lots of bad credit customers in the marketplace at the moment. Big rebates are about the only thing an automaker can do, other than have GMAC write loans to secondary credit people.

 

Thats exactly right. I worked 27 years for an OEM supplier. We quit bidding on all big 3 automotive oem work in 2000. Some of the crap they would pull was unreal.

 

Yes, the Avalon is going to steal a lot of Camry sales even, and the Camry may not be the best selling car in America for 05 like it has been, just cuz of the new Avalon. That new Avalon is my personal favorite Toyota.

The 300 HEMI C is an awesome car, well worth MSRP of 34 to 39K. A total blast to drive with the electronic nanny turned off. Hard to believe it is a four door, the handling is much better than any 4th gen ever was even.

 

It's not about volume purchasing anymore. If the conditions exist to allow a volume discount, it can be given.

There are a few conditions that allow a volume discount:

1) Common capital equipment. If the added volume increases the rate at which a piece of capital equipment can be paid off, then the buyer of the component can reasonably expect a discount.

2) Common tooling. If the component can be produced off a piece of tooling that is shared across a larger volume of parts, then a discount can be expected there too.

3) Common engineering effort. If the additonal volume of the component in question allows the engineering time and resources expended to be paid off over a larger volume of components with no increase in engineering time and effort, then a discount can be expected there.

4) Less manufacturing down-time due to changing set-ups.

The above four conditions include the benefits seen from a greater utilization of raw materials and other commonalities (common packaging, common sub-supplier components, etc...).

That's it.

You can't get a significant volume discount any other way.



The core of the issues that GM is having with their suppliers is this:

Not only are they all treated like the scum of the Earth for acutally wanting to make money (***GASP!***), but GM won't even do what's in IT'S OWN SELF-INTEREST.

I can pull the trigger RIGHT NOW on a $4 saving per vehicle that will provide not only a less expensive product, but a BETTER ONE TOO. Better performing, longer lasting, ALREADY IN PRODUCTION AT GM, ZERO RISK, lighter and less expensive. Better every stinking way a product engineer, quality person, manufacturing engineer or purchasing agent can think of as better.

No go.

GM's too OVERWORKED/UNDERSTAFFED/LAZY/INEPT/BUREAUCRATIC (take your pick - the end result is the same...) to execute the change.

Everyone at GM admits it's a better product. They all know it's less expensive. They JUST WON'T DO ANYTHING, and the supply base is sick and tired of it.

Meanwhile they've been beating us up for YEARS to give them money back out of one side of their mouths, threatening us with taking our business out of the other, shopping our patented engineering solutions around with the third, and when I'm ready to implement a huge cost savings and a better product, what happens?

NOTHING, and it's 100% GM's fault.

Now, you tell me where I as a supplier should put my resources???

I have a duty to the shareholders of my company (even though I'm not an officer of the company) to make the best decision I can for their investments, and that decision DAILY comes closer and closer to ignoring GM. It's not just the little guys that are thinking that way anymore. The MULTI-BILLION DOLLAR suppliers that are the largest suppliers in a given commodity worldwide are thinking that way now too.


No one in the supply base is expecting to be coddled. This is business. The cold, hard calculus of dollars and cents - and GM's too inept to even look at it that way - money, ripe on the tree, sitting there ready to be plucked and GM is to buffoonish to even do that.




HEY, ANYBODY AT GM LISTENING???? I'VE GOT $4 PER CAR THAT I CAN IMPLEMENT LIKE YESTERDAY AND GET YOU A BETTER PRODUCT ANY WAY YOU CAN MEASURE "BETTER". DO YOU WANT IT????

 

Yes if GM treated suppliers like partners the way Toyota does, they would be a lot better off. Thats what I mean about GM copying Toyota, not in styling, but in how you run the business. Work with vendors and employees. Have QDR and pleasing the customer be the mission statement.

Maximizing shareholder value should be a byproduct, not the driving force the the company pursues everything else be darned.

But while we are it it, GM should also:

Get into hybrids NOW. Buy what you need from Toyota. 45 mpg is nothing to ignore. Put that pie in the sky hydrogen crap on the back burner. Do diesel hybrids. Thats how you get a 80 mpg car almost immediately. You need cars that will sell now, you may not be around in 20 years to realize the payoff in hydrogen research.

Also dump those Aveos for america. They give you a black eye. Sell that crap oversea but not here. Cars that are sold in a certain country should be made in that country. Dont sell Mexican here, sell it there, but not here. Same with Chinese, sell it there, but not here. Toyota has no problem with executing this concept profitably, they build in every country they sell in, why cant GM get it done too?

When we did OEM stuff we would often get a batch of parts that were sourced from China that were defective, and we were to try to fix them. No way they could be made right, they were just scrap. They just dont have the infrastructure or SAE standards in place. Japan and Australia are the only Asian places to source parts from that I would trust at the moment.

Mexican stuff is really not up to par either. They have got it so it holds up during the warranty period, but after that.....I am no longer a supporter of mexican production. The resale values of cars made in Mexico and Korea tell you all you need to know.....The resale market does not lie. Build US cars in US and Canada.

I would keep all current GM divisions, and maximize/specialize them to different target markets. No way to ever get back to 30 percent market share without the current dealer network.

I would experiment with Saturn, and Isuzu. Both are lost causes at the moment.

Keep Saab as scandanavian, maximize its design heritage and design input. Keep the keys in the center console, make sure that the trailblazer Saab 9-7x has hood struts and plenty of Saabish details, and put hood struts on the 9-2x. Lack of hood struts just screams cheapness. Customers bitch about that alot during product presentations on the lot. Kudos for putting a hood strut on the Cobalt!!!!!

Ditch AWD in products like Denali, make them 4 wd with a 2wd/4wd ****. We get a lot of trade in Denalis on 4 runners cuz people are not happy about 9 mpg city 15 mpg highway. Make it switchable 4 wd and you gain to 13 mpg city 19 mpg highway asap in the exact same vehicle. Poor gas mileage is killing GM truck sales. Maybe have to give away $2000 gas credit cards BESIDES the rebates to move the trucks now. Bet it would work.

As far as on star, Its not a deal maker, and for sure will NOT SAVE THE COMPANY. I dont want it personally. The antennas look too butch, and they dont match the color of the car, and they are too prominently placed. Hide the antenna and I will think about it. I prolly would have bought a new Suburban last fall, but I could not find one without Onstar, so I didnt get one yet. I have just kept my old one. Now with gas the way it is I doubt I will be getting a new Suburban, tho with careful ordering I can get one without the onstar, but the price of the fuel now...I dont know....Does not look good for Suburbans in the future. SUVs are not gonna save the company anymore.

I think it is incredibly DUMB to take ABS off the Monte Carlo as standard yet have OnStar be standard??? Earth to GM, people dont buy cars without ABS anymore.

Stabilitrak. ho hummm Not gonna save the company.

I guess I agree also with many here, its not marketing that will save GM, its product. Its not gizmos, it is value, quality, durability, reliability, and also must have great looks and styling.

Things that I would lobby for from the government if I were GM, besides national health care.
Steel EXPORT tarrifs. We can make plenty of steel for our own use, why dont we just force steel companies to keep it here? We are really hurting ourselves as a country.
Same with ANWAR oil, it should all go here, and none of it overseas. Why pollute Alaska so China can have cheap oil?? It makes no sense. Steep tarrifs on oil exports too, or even better yet, keep all the oil and gas from Alaska here.