The 67 Goat 389, from Pontiac's heyday

Well, GM finally did it. After months of speculation, the General finally decided their most performance oriented brand could last no longer. It make me wonder how much of that was a PC oriented move, and how much of it was based on purely business considerations. When you’re taking so much money from a federal government that has indicated the public needs to start buying fuel efficient vehicles, how does it look to make vehicles such as the Pontiac G8? Especially that new G8 GXP with the breathed on V-8.

The brand that brought us the 389 Goat and the Smokey and the Bandit Trans Am will go in that good night, but will all performance offerings from GM do likewise? Due to budgetary concerns, they already killed their performance engineering division (PVO) that was responsible for the CTS Caddys and the ZR1 Corvette. Time will tell if the Corvette is the only performance oriented vehicle left at GM. I only hope it can hang on. After all, it is about the most fuel efficient, true, high performance vehicle in existance.

They killed off Oldsmobile a few years ago, and now Pontiac is gone. How has Buick managed to escape the chopping block for so long?

So long Chief!

New 2010 Cadillac CTS Coupe - The last of the good ones from GM?

So, the Obama administration has decided they no longer like having Rick Waggoner as CEO of GM, so he should resign. It’s somewhat reminiscent of the mob “suggesting” that the local shop owner should pay them insurance money because the world is a dangerous place. Now the Obama administration can step in and tell a company that the administration knows more about their business than the company’s board of directors does, so they should be the ones to decide who leads and who doesn’t.

Where does this stop? Will any number of companies have to seek the administration’s approval before appointing people to management roles. What criteria will the government use to decide who is worthy to run a company and who is not? Will one of the primary criteria be who is more likely to toe the administration line on policy and procedure? A frightening thought, that. It points to the reason why taking federal money is a dangerous gamble, with plenty of strings, and no guarantee of success.

Precisely how much does the Obama administration know about running a large motor vehicle producer? As one of the major supporters of the administration are the Nation’s unions, it raises the question weather or not Rick Waggoner’s decision to renegotiate GM’s union contracts in 2007 played any role in the administration’s decision. In fact, GM probably should have declared Bankruptcy long ago so they could have gotten out from under the parasitic agreements that greatly contributed to their downfall.

What role has Waggoner played in the decline in the General’s fortunes? Why precisely does he deserve to be removed as leader of one of our nation’s greatest companies? He has been criticized auto industry insiders and analysts for being hesitant to close plants and streamline the company in an effort to restore profitability in the face of declining sales.

Many have condemned him for relying on large trucks and SUVs as a main profit center for GM, such that when fuel prices rose dramatically last year the company was left with expensive, unsold inventory. Many of these same people and others really feel that the average citizen has no place piloting such mammoth vehicles. They are concerned that that such modes of transportation consume far more that their fair share of resources. However that is determined….

The consensus from many environmentalists, those in the administration, and others is that GM brought about their own demise by relying too heavily on such large vehicles. When gas prices rose, they got a well deserved whacking about the knees.

The ironic thing is that GM has been losing money and the aforementioned large vehicle sales were actually making a handsome profit for the firm. Should they have stopped production of such vehicles, only to see their revenues and profits decline even further? That probably would not have been a sound business strategy. I can see it now..”Well, product line ‘A’ is making us the majority of our profit, but some people don’t like it, so we should probably shut down production.” “But Jack, the customers love them, and they keep buying them.” Yes, but that’s not really important right now, is it.”

It wasn’t like some people would have you believe. GM was not like a drug peddler at a junior high school. They didn’t force these vehicles on consumers. No, they built them in response to consumer demand. They couldn’t just their product mix change at a whim when fuel prices rose 35% in a year. Consumer demands can change much more quickly than the products they want to buy.

For those of you unfamiliar with product development cycles in the automotive business, they typically take many years. Motor vehicles are complex pieces of machinery, subject to any number of regulations and customer demands. You can’t just slap them together in a few months in response to any market condition that happens by.

Waggoner has done more than any GM CEO in recent times to reverse the General’s problem of just plain producing generally inferior products over the past 30 years. That’s right, for the most part, GM made crap with 4 wheels. There were exceptions, such as their pick up trucks, but mainly there was quite a bit of garbage rolling off the assembly lines.

Waggoner has, in great measure, changed that. Since the beginning of the millennium there have been some nice, even world class machinery leaving the lines at GM. Cadillac has seen a resurgence, releasing the redesigned and highly regarded CTS last year. This mid-sized luxury sedan has been favorably compared with the best from BMW, Lexus and Mercedes. GM’s trucks are better than ever. The Corvette provides world beating performance and handling for a fraction of the cost of other sports cars. The new Chevy Malibu looks good, has a nice interior, and gets over 30mpg on the highway, while holding 5 passengers in relative comfort.

Something else; wonder of wonders, GM finally learned how to design a nice interior and cockpit. No more ugly interiors in American autos. The new truck and Cadillac interiors are fantastic. The Chevy Malibu is a great place to spend time behind the wheel, and the Corvette finally lost the diso, video game look to something more like you’d find inside a real sports car.

The new Chevy Traverse and GMC Acadia is an attractive, large SUV for those who don’t need to tow heavy loads. It returns the best fuel economy in it’s class while seating 8 with a decent amount of room.

It’s not to say that every vehicle GM produces is fantastic. But it’s too bad just as they are finally producing some great vehicles again, they may be led around by the administration like a dog on a chain. They’ll be able to dictate who leads, how they do their marketing, where they have their corporate retreats, how they travel, and which vehicles they produce. That doesn’t sound like a recipe for success. It sounds like a 5-year plan in the Soviet Union, circa 1935.

If this is any indication, industries will be led by those who know nothing about them, have never run a business before, and beholden to any number of interests besides the share holders and employees. If the share holders and board of directors decide that Waggoner has been doing a rotten job and want him fired, that’s fine, kick him out post haste. However, the leadership of the country should not also be the leadership of our major (and possibly minor) businesses.

In this case, they’re probably booting out the wrong guy. He’s actually done a decent job and whoever they appoint to replace him may not do nearly as well. If the government can lead him around like a bull with a ring through his nose, they’ll probably be much happier.

Maybe those in Congress should hold themselves to the same standard. Wouldn’t that be a change. When congress has a 10% approval rating, as they did a few months ago, perhaps they should resign. Chris Dodd, (D-CN) indicated that it was time for Waggoner to move on. Maybe Dodd should take his own advice. At least maybe he could help all of us get a better mortgage interest rate. Are the likes of Dodd who we want at the helm of or businesses or our nation?

The announcement that Porsche has increased their ownership stake in VW from 42% to a majority of 50.76% also means that Porsche is now the world’s largest automaker. You thought GM was the largest? After all, GM produces a hell of alot more Silverado pickups (almost 500,000 annually) than Porsche makes 911s, Boxters, and Caymans combined.

Actually, if you look at the valuation of the two companies, VW was the largest. GM’s market cap as of this writing is $2.32 billion, whereas VW is worth 103.5 billion Euros. That means VW is worth 50 times what GM is worth.  So, hop in your Rabbit and pretend it’s a new 911 on your way in this morning.

It seems ironic that as they have been on Capitol Hill being told they should produce more futuristic, fuel efficient vehicles, they would consider dropping their 3 lines that are most skewed toward the small and fuel efficient. Saab makes no large vehicles. Pontiac makes a couple of larger sedans, but on the whole it tends toward small and mid sized cars. Saturn produces mostly smaller vehicles, with the 8 passenger Outlook SUV thrown in. Starting at less than $30,000, the outlook is a more value oriented alternative for those needing such a large vehicle. You’d think value would appeal to people in such restricted economic times.

A few years ago The General axed Oldsmobile and kept Buick. Once again, it seems Buick has survived corporate scrutiny, at least in the short term. As a car company that makes mostly larger cars and SUVs, you’d think Buick would be one of those GM looked to dump. After all, they’ve already dumped Tiger Woods, their spokesman aimed at shifting Buick’s image a few decades younger. Tiger was informed earlier this week that his lucrative endorsement contract would no longer be needed.

Until next time…………..

Democratic Presidential Candidate Barak Obama ……… Does he go fast on weekends?

F1 Driver Lewis Hamilton

Or Maybe outspoken GM Exec Bob Lutz could be…..

GM Exec Bob Lutz

Related to…………….

John O'Hurley - (Elaine's Boss on Seinfeld)

And, is it possible that F1 driver Robert Kubica is actually……….

BMW F1 Driver Robert Kubica

The secret identity of …………

Rap Star Eminem

Who knows?

Until next time…………………