Wards makes some positive comments about GM, not any good comments about Chrysler.



http://wardsauto.com/ar/chrysler_doomed_analyst_090225/

 

Was reading along trying to understand all the Harbours and Harbour-Felax's and make heads or tails of it all, and I came to this...
"“The U.S. industry will become more like Europe, where five or six smaller companies have a smaller piece of the pie,” says Harbour-Felax, who credits GM Chairman and CEO Rick Wagoner with implementing sweeping changes to reposition the auto maker to take advantage of the economic turnaround widely forecast for 2010.
GM is “building common platforms and using common equipment, all of the things Toyota has done to be successful,” she says. “They are doing things as good, or better, than Toyota. I’ve seen GM do stuff and take Toyota’s process to the next level. But they don’t get the credit for any of that.”
Harbour-Felax says the primary reason Wagoner has not been credited with transforming GM is a negative perception of Detroit auto makers permeates both Wall Street and Washington."

OK... hold the phone... I have a mental case on hold.
I LOVE GM. I pull for them, I defend them, I make parts for them, and I am on their side for sure. And I think they make cars/truck that are as good or better than import stuff. But I have HUGE problems with the big-ship philosophy that GM is mired in. They are like a big ship in he bathtub... can't change directions fast, can't get moving fast, can't slow-down fast, and it takes a bureaucratic act of congress to get new product through.

They also DO NOT use empowerment in their processes like Toyota. At Toyota, ANY person can stop a delivery, a shipment, a sub-assembly line, or the main assembly line if they identify a problem. Not only are they NOT punished for it, but they are REWARDED if the problem is authenticated and properly contained. TRY that at a GM plant.

Wagoner... not credited with transforming GM?!?!
Because HE HASN'T!!! He has ridden through the same old continuing loss of market and loss of profit that GM has been in for decades!!!
I like Rick, and don't blame him for all of the woes, but he has not reinvented GM while sitting in the King's Throne. I'm sorry.

SO that first quote threw me a good loop, but this got me even better...
"As for Ford Motor Co., which has yet to access government loans, Harbour-Felax says the auto maker’s situation is much worse than it lets on.“They mortgaged the farm a while ago, so they have some cash. But they’re in trouble,” she says, referring to the $23 billion loan Ford secured two years ago. “And they are five to six years behind GM in their efforts to make the company better.”
Meanwhile, Harbour-Felax says she thinks auto industry sales may have hit bottom, but a rebound only can occur if the government is able to unfreeze credit for potential buyers."

Ford is BEHIND GM in efforts to make the company BETTER?!?!?

Ok that's it. One whacked-out chick writing her misinformed opinion in a recognized financial journal... and it's one too d@mn many IMO. She needs to write about plastic surgery and botox treatments - NOT the auto industry. There again, after seeing her pic on the right side of the article, I doubt she needs to write about the plastic surgery either... looks like she has about the same experience with that as she does car-making.

BAD article.
I give it 0 credibility and I disagree with almost all of it. I'll go along with the the "Chrysler doesn't look good" part of it, but who doesn't know that since Christmas?

 

Dang, that article is already two-weeks old. Futhermore it was written before the huge thrashing of GM stock last week.

 

Why is Chrysler in such a bad state financially given it has a rich parent? It just doesn't make sense to me that Chrysler is treated as a failed company when it is owned by a financially stable entity.

If Cerberus no longer owned Chrysler, I would understand... but for Cerberus to be begging for govt handouts is ludicrous (to me anyhow).

 

Here's their explanation of why the won't (and supposedly can't) put more money into Chrysler:

http://blogs.wsj.com/deals/2008/12/1...into-chrysler/

 

Why would Cerberus put any more of its own money at risk when it can get it from Uncle Sammy???

Cerberus isn't a car company and they don't want to be a car company; they just want to turn a profit (or at this stage of the game, not loose their shirts) until they can unload Chrysler.

 

It's clear you disagree with her assessments.

I wouldn't call her "whacked out" or "inexperienced".

She's been involved with the auto business for some time, very knowledgable about OEM supplier challenges and pretty right on in her studies about profitability differences between the imports and domestics. Her father is Jim Harbour, and he's not exactly a dunce on the car biz either. He's the chairman of her company, BTW.

She can be right or be wrong. But she's not ignorant about the inner workings of the auto biz.

Whatever your opinion of her appearance, what possible bearing does that have regarding her ability to form a reasoned opinion?

 

She is actually correct in what she is saying. GM started this campaign of common platforms and tools before Ford. A few years before Ford.

GM has lost market share. GM has changed the focus to profitability. Who cares if you have 99% market share if you don't make a dime.

Both of these come under Wagoners watch. Are they in the same boat as Toyota, I don't know. They still have to get better products out, which will take time.

Ford has improved in quality, but that is all they have better than GM right now. The loans they acquired were more good timing than anything else, and Ford is burning through that cash right now. Without sales picking up, they are going to be needing federal funds as well.

Without the common tools and common platforms, Ford will be making less per vehicle while it is playing catch up. GM does have an edge here absolutely, which translates to profitability.


I don't have visibility into GM's culture. So I can't comment on that. I do see several people commenting on it though, mostly negative. I don't know how many of those people actually work for GM today or since Rick took over. I don't listen to those arguments because they are largely speculation. Even if it is from someone who does work there, it is one opinion out of many. I don't have visibility into Ford's culture or Toyota's. I don't listen to those opinions either.

 

I know, which is why they are undeserving of a handout (IMO), which they thought would bring in some short term $$$. Put simply, their investment was a poor choice and now they want to be compensated?

Anyway, how's this scenario...

"The real reason GM and Chrysler want to stay out of Chapter 11 is that it would force them to make real, disruptive changes -- especially, perhaps, in the executive suites. And Cerberus, the private-equity behemoth that owns Chrysler, would see its stake diluted or wiped out."

http://detnews.com/apps/pbcs.dll/art...ON01/903100323

 

From a vehicle standpoint, GM's only problem is that it has a product development & approval process that is conservative to the point where it actually works against new vehicles.

GM has had universal platforms for some time. This decade, they have gotten alot better, and actually were quite a long ways ahead of Ford on integrating global operations.What happened was that GM took it's time in completing this, and when Alan Mulally took over Ford, he shifted Ford's global integration from "foot dragging" into "hyperdrive".

GM by far has the biggest and best resources of any carmaker on the planet. Greater than Toyota, even. GM's tragedy is that GM's North America operations instead focused on large trucks and SUVs and essentially relied on incentives instead of fresh designs.

 

I don't really think that was a mistake or a tragedy.

People wanted and many people still DO want large trucks and SUVs and there is nothing wrong with aggressively going after a market segment and attempting to meet consumer demand.

The problem is that, for reasons that have always escaped me, they went after that market and seemed to almost totally ignore all other segments of the new vehicle market rather than try to compete in it effectively.

 

I'm not sure one can actually say GM ignored the car market and be accurate.

Corvette, Malibu, CTS, Volt, Cruze, Camaro...etc. Some fine product there.

Trucks and SUVs still sell and will continue to do so. Crossovers are still a big thing and Traverse, Enclave, Acadia, SRX, the upcomming Equinox...

When you are at a legacy cost disadvantage, there's not a great business case for chasing a market where the Imports have an advantage that can showhorn a company to making vehicles to meet government CAFE and have to lose money on every one due to the legacy costs "built in" to every vehicle.

There are types of vehicles that have monthly payment amounts as the definer. Every grand is about $20 a month over a 60 month note. $40 bucks a month additional in payment is more than most folks can or want to swing.

The imorts, particularly the Japanese, are not paying big legacy costs. Nonetheless, the Japanese will be at a disadvantage in labor costs to the Koreans, and everyone will be at a disadvantage to India and China.

I don't know about anyone else, but I have noted that the Japanese are trying for a higher profit level in the vehicles they concentrate on.



Corvette, Malibu, CTS, Volt, Cruze, Camaro...

 

No question, GM has had some fine vehicles and legacy costs are a big issue. However, I think it also true that GM could have chosen to compete more and with more success with all comers and had they done so and done so early enough, their legacy costs would have been less of an issue; in part because they wouldn't have lost as much market share to their competition.

I know...would have...should have...could have and everyone must deal with where they are now.

 

Hindsight is always 20/20.

You are very correct about dealing with the circumstances now as being very important. Now and the next three years is the focus.

There still hasn't been much coming from the government about what they intend to have as viable and not viable when it pertains to vehicles.

This cap and trade noise and healthcare rumblings are certainly not going to make predictions about the future and what vehicles will be wanted as a result of taxes on energy, economic outlook for jobs, and any real changes in take home pay.

Economic conditions in europe and China will be a factor as well.

Hopefully the intent isn't to force hyperinflation to reduce the size of the deficit.

 

Half the cars you offered up as examples of what a good job GM is doing are not for sale. If GM was doing a good job you would be listing cars that are on the lot not on paper.