GM's out of bankruptcy.
Yah, it was 16-year old boy fast.
Well, it's not REALLY out of bankruptcy. See, the "new" GM is out of bankruptcy. Because the "old" GM sold all it's "good" stuff to a company it created that's owned by the US gubmint, the Canadian and Ontarian (really? we're seperating? sweet!) gubmints, the "old" GM bondholders, and the unions. So the brands they're keeping (Chevy, Buick, Cadillac, GMC), and they stuff that still works is in the new company. All the crap? The shuttered factories? The debts? That's with Motors Liquidation Co., or the "old" GM, which will probably never be out of bankruptcy.
How awesome a shell game is that?
You go bankrupt, shove all the bad crap into a generic company and leave it in bankruptcy, and sell all the good stuff to the government and come out with the same name looking all sparkly.
Management will be cut by 20%, and executives tiers by 35%. Around 40% of the dealers are gone, and health care and pension obligations are down $48 billion too.
The promises of fuel-efficient and hybrid vehicles will come to fruition, honest! They'll make cars people want, fo reals! No more executive bloat! Labour costs down! Rainbows and puppies and lollipops for everyone!
There's been a lot of shuffling at the top, there's a new boss, and a whole whack of debt to the American and Canadian taxpayers. The union will sell their share as quickly as possible because they just want the cash, not the responsibility. That way, they can also start holding GM over a barrel again if times get good. Their labour costs may be in line with Toyota and Nissan and the like now, but that will change over a couple decades. If they last that long.
It all smells like crap to me. There will be token gestures. Designs won't be innovative, because that would involve taking a risk, and risks are scary to suits. Expect more cars that look the same as every other car on the market. Expect minor improvement being sold as the second coming. Expect deals and cuts and a million other incentives to buy overpriced vehicles. Expect that eventually, it will be bloated again with focus not on car quality or consumer happiness, but the bottom line and exterior businesses that make more money for them. Why? Because building a fuel efficient car that is fully-loaded and will work for 10 years without needing major service means less sales, less secondary money from the GM service shops, less loans, and more need to keep improving enough that people WANT to upgrade.
GM is floundering. Every commercial, every press release, every piece of news stinks of bullshit and death to me.
The silence from Chrysler is deafening.
Ford, oddly enough, is actually sounding honest. As honest as an American car company can at least. They've had an extra year to get their shit together, having gone bankrupt before the credit crisis. They've jumped on the opening made by their competition's problems and the fact they didn't need taxpayer money to surivive (thanks to the loans they secured when they went under). I don't think they're being revolutionary, but they're playing to their strengths - trucks, the Mustang, and small fuel-efficient cars that have already worked in Europe. All they're doing now is talking about them, and juicing them up a bit. Are they the "new Ford"? I don't think so, but they're newer than the "new GM".
Friday, July 10, 2009
GM's out of bankruptcy.