AND 
GM Updates Viability Plan: Pontiac Will be Phased out by End of 2010, Volt Still on Track, Debt Exchange Offer Made
GM has little more than 30 days to go before the government’s deadline to either achieve viability or enter bankruptcy.
Today CEO Fritz Henderson provided an update which it hopes will lead to satisfying the governments objectives by the June 1st.
The following steps were outlined:
-GM will focus on only four brands, Chevrolet, Cadillac, Buick and GMC. Pontiac will be phased out by the end of 2010. Hummer, Saturn, and Saab will be resolved by end of 2009
-more aggressive dealer reorganization; the current 6200 dealerships will be cut in half by 2014
-accelerated plant idling and closures
-reduced structural costs to reach breakeven at 10 million vehicle yearly US sales volume. This involves reducing hourly jobs by an additional 7000, and an agreement to reduce hourly labor costs by 34%
-The plan also involves continued negotiations to reduce healthcare trust obligations and bond holder debt.
Per CEO Fritz Henderson:
“We’re also announcing today a number of key initiatives to restructure GM’s balance sheet, including a bond exchange aimed at reducing our unsecured debt by at least $24 billion, a goal of exchanging at least half of our VEBA obligations (about $10 billion) to GM common stock, and a request of the U.S. Treasury to convert at least half of GM’s government debt to GM common stock.”
One statement in the press release raises some questions though:
“Very importantly, development and testing of the Chevy Volt extended-range electric car remains on track for start of production by the end of 2010 and arrival in Chevrolet dealer showrooms soon thereafter.”
Does this mean Volt arrives in 2011? According to Volt spokesman Rob Peterson this does not represent a change. He said “It shouldn’t raise any questions. We’ve consistently stated that the Volt will be launched in November 2010 and in dealerships soon after.”
Finally it is acknowledged that if the debt exchange offer is not accepted that GM will “expect to seek bankruptcy relief.”
Press Release 1
136 Responses to “GM Updates Viability Plan: Pontiac Will be Phased out by End of 2010, Volt Still on Track, Debt Exchange Offer Made”
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April 27th, 2009 at 9:38 am
1st.
Can we really be surprised by really any of the announcement? We knew which Brands GM was going to keep and we should not be surprised that they may not have the Volt on showroom floors in November of 2010 (though I think they are losing ground the longer that they wait).
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April 27th, 2009 at 9:39 am
GM will not have enough Volts to keep in the showrooms. They will be sold right away.
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April 27th, 2009 at 9:48 am
This elimination of brands is much more aggressive than initially reported.
Saturn was going to stay around until the products reached their end of life cycle. Now they will be gone the end of this year. Same for Pontiac.
We own a Pontiac. I had 2 Saturns, both good cars. I hope they keep the Solstice and Sky in a Chevy form. Will Chevy dealers now be pegged to service Saturn, Pontiac, and Hummer?
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April 27th, 2009 at 9:49 am
This is all to be expected. Chrysler will give some good indications of how far the UAW will go with concessions — seems like quite far at this point. The Volt program may have slipped a month or two, or maybe not — this may just depend on semantics — but if the new schedule is in showrooms by January 2011 then the new schedule is not significantly different than the existing one.
We’ll see what happens with the bond holders …
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April 27th, 2009 at 9:50 am
Even when the Prius had a 9-month waiting list in 2004, my local dealer still had a few demonstrators. Only the die-hards here will buy sight-unseen. Still, I’ve always been of the view that Nov. 2010 v. Feb./Mar. 2011 is much less important than putting out a product that makes a very positive impression for GM.
My link to Chrsler/UAW concessions article. See post 119 on last thread.
http://www.marketwatch.com/news/story/UAW-reportedly-reaches-deals-Fiat/story.aspx?guid=%7B5EF65662%2D9B6F%2D456C%2DA8BD%2D34D3A8BAA7B8%7D
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April 27th, 2009 at 9:50 am
That’s nice. I guess everything is fixed now. Somehow the UAW will give concessions, the bond holders will give concessions, Hummer, SAAB and Saturn will somehow resolve any day now and GM will be lean and… well, just lean. Still planning on working with the UAW, they have learned nothing.
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April 27th, 2009 at 9:58 am
I don’t see anything new here. GM gets leaner and meaner which means that the Volt is more secure. GO GM! GO VOLT 1
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April 27th, 2009 at 10:02 am
GM is not a viable corp any longer. The only reason you survive is because you attach yourself to the left tit of your government. This type of pathetic behavior would be unacceptable in Japan. Man Up GM. Do the honorable thing and end yourself now. If you happen to survive prepare yourself for the onslaught of European and Asian high-quality EVs that will make the Volt look like a fool’s tool. Most puzzling is why American people sit back and allow this raiding of taxpayer money happen. GM has flushed billions of taxpayers dollars down the toilet and still wants more. Unbelievable ! This could only happen in America. LOL
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April 27th, 2009 at 10:02 am
Solo #3-
“Will Chevy dealers now be pegged to service Saturn, Pontiac, and Hummer?”
—————————————————————————————–
This is already happening in my area. I too own a Pontiac and in the last two months, the dealership I bought it at and the dealership I preferred to take it to for service both went out of business. I got a flier in the mail from a local Chevy dealer telling me that they are now taking over servicing of Pontiac, Buick and GMC. My wife is shopping for a car now and we went to look at Saturn There are no close by Saturn dealers anymore, so we had to drive to another area. When we got there we discovered that the Saturn dealer there had just taken on all the other GM brands, sort of hedging their bets. The dealerships seem to be consolidating down to a one GM dealer model on their own.
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April 27th, 2009 at 10:03 am
@3 Solo,
>> I hope they keep the Solstice and Sky in a Chevy form.
This is strictly from my (often poor) memory, but I thought the Kappa platform was already ended. Maybe I’m incorrect?
I concur with your statement about Saturns, in particular the two manual 5-speed SL2’s I owned. Great little cars!
Now to combine the two ideas: An EREV Sky would be the cat’s arse! I would really dig owning an all-electric Sky like Amp Motors is working on (see here: http://www.ampmotorworks.com/ ) but sheyitt, I’m not made of money. And Amp’s Electric Sky still leaves the little matter of limited range, too. EREV would avoid that snag.
@8, Takanobu:
>>The only reason you survive is because you attach
>> yourself to the left ….
Not to feed the trolls, but have you got somethin’ against the right one??!?
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April 27th, 2009 at 10:06 am
my post from the last thread:
I think if i was a bondholder I would take the deal. Roughly 50cents on the dollar, and if they truely do breakeven or become profitable in 2010, you could get all your $ back. This seems like a good deal vs. getting a few pennies on the dollar in a bankruptcy court.
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April 27th, 2009 at 10:11 am
Nothing about Opel ?
I live in Europe and the Opel Ampera is going to be a success with gas at 8$ a gallon…
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April 27th, 2009 at 10:13 am
Besides confirmation on the death of Pontiac, the most interesting thing is the acceleration of dealer attrition. A reporter asked Fritz about it, and he kind of skirted it.
The problem is you can’t just cut out dealers, and his choice of words was telling, he said GM was ’sending them offers’ late this month. Trying to cut out 3,000 dealers is like Wagoner’s Oldsmobile fiasco times 20.
I think maybe it is just ‘big talk’ in front of the deadline, because there is really nothing they can do to lose them short term, it will be a legal nightmare for years…unless they do the ‘dipsie-do’ into C11/GSB.
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April 27th, 2009 at 10:13 am
With Michigan unemployment over 12%, these closings and permanent layoffs aren’t going to help. I hope the other 49 states are ready for an influx of Michiganders.
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April 27th, 2009 at 10:15 am
Although I still question the need to keep GMC, I can understand the reasoning. GMC only sells trucks, SUVs and CUVs that have high margins and are profitable. GMC does not have to sell compact or mid-sized cars at a loss. GMC is probably the most profitable line GM has even considering Cadillac as a close second. I don’t agree with the decision, but I can understand it.
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April 27th, 2009 at 10:17 am
GM better have detailed the losses the Volt will bring. Remember, only the rich can afford a Volt. So if you want Volts to sell, you better hope for the top 10% to want to buy a Chevy. They are the only ones who can afford to spend so much on an investment that will cost more money than a comparable car. This is the main reason the Volt should have been a Caddy or Buick first.
The Sky-Solstice line was discontinued already.
The only Pontiac surviving will be the G8, and it should become the next Grand National. The G8 with styling like the new LaCrosse equals super hot.
The more I read the more I worry for the Volt. I believe GM will botch the marketing.
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April 27th, 2009 at 10:23 am
As long as they get it right the first time I’ll wait, but I’ll be pissed if my current car dies before it does.
About cost. Is there any hard data on the cost of UAW works vs Non Union works in the US Auto Industry. Can somone point out a link? The UAW may be a problem but I don’t like it when people just throw acusations out there about the UAW bringing GM down without backing it up with some facts. Sorry if I missed a thread on this one.
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April 27th, 2009 at 10:27 am
Note that it says the Saturn, etc. issue “will be resolved” by Dec ‘09. It doesn’t say they’ll be discontinued by then…
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April 27th, 2009 at 10:28 am
More good news on the way, Bush the grim reaper and Obama the undertaker, onward and upward in America, land of the broke and the government bailouts for the rich wall street crooks, thats it Im done I have had some great GM vehicles but if the U.S. government takes control of GM forget it, I WILL NEVER BUY ANOTHER GM PRODUCT, THAT ALSO INCLUDES THE VOLT. At least the post office can redesign the failed Volt for delivering mail.
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April 27th, 2009 at 10:29 am
This is an interesting story from a news source that usually homogenizes news to skip on details that can explain a situation better:
http://www.msnbc.msn.com/id/30389457//
Points of Interest:
- How fickle consumers are. Vehicles that the buying public could not enough of two years ago are now suddenly being built only by the Detroit Three. It was YOU buying them, Joe Q. Public.
- With all the new Cadillacs such as CTS being introduced, people kept bringing up the Cadillac Cimarron and how horrible it was (didn’t all cars in the early 80s?), but when the Genesis came out, the Excel was generally not mentioned
- How companies that were unsuccessful in the early to mid 90s, but now are dominant. That comes back to the word: fickle.
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April 27th, 2009 at 10:30 am
#13 Statik:
All I know his, even without incentive, GM dealers are going under and closing doors. What GM can’t do, economics will.
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April 27th, 2009 at 10:33 am
I am ready for some good news for a change. How about that Volt ride story, Lyle? These post lately are too darned depressing. I am glad I have been off and not checking the site since Thursday. Came back today and the only “up-lifting” story is about Honda getting into the battery business and considering building what ever they can to “rule the world”. Sometimes “no news is good news”.
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April 27th, 2009 at 10:36 am
I’m accepting and agreed with removing the Pontiac brand. It is completely redundant of Chevrolet, and terribly diluted for several years now. Why even mess around with a “niche brand” idea of 2 cars anyway. It makes sense to kill the brand completely at this point.
The article said, “Hummer, Saturn, and Saab will be resolved by end of 2009″. What does this mean exactly? Does it mean that GM is still looking for buyers for these divisions, or that the word “resolved” actually means “dissolved” in this case?
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April 27th, 2009 at 10:40 am
#22 N. Riley said:
“I am ready for some good news for a change. How about that Volt ride story, Lyle?”.
I second that motion. Unfortunately as far the request for “good news” may be quite a ways on back order until that starts coming in. I would be happy to be wrong of course.
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April 27th, 2009 at 10:41 am
I believe I have read where GM wants buyers for Hummer, Saturn, and Saab. Since Pontiac is a long time GM name, they will pull an Oldsmobile on it.
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April 27th, 2009 at 10:42 am
#23 Schmeltz
I suspect “resolved” could mean what ever comes around. If they can sell off those lines, they will. If they can not sell them, they will close them down. Kind of like what they will with Pontiac. Just stop making vehicles at some point if they can not sell them. But with today’s world, what do words really mean. Not much. They change meanings from day to day.
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April 27th, 2009 at 10:45 am
#25 Adrian
Exactly! As I stated in so many words in comment #26. Sell them if they can or shut them down if they can’t. The only other choice is to continue building vehicles with those name plates and that ain’t gonna happen. As they say.
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April 27th, 2009 at 11:02 am
I realize GM has contractual obligations to dealerships, but in this economy, why would GM provide any incentive to dealers to shut down? There are at least a dozen dealerships that have shut down in the Bay Area in the past six months just because they couldn’t sell cars. Wouldn’t it make more sense to leave the dealerships alone and leave it upon themselves for “survival of the fittest”?
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April 27th, 2009 at 11:02 am
Of course previously GM said they would either sell Hummer or shut it down by the end of March, that didn’t happen. So I’m guessing the 2009 is just a random date they picked to keep reporters off their back.
“Yes, we know we’ve been trying to sell Hummer since last year, and we know we said we’d shut them down if they weren’t sold by the end of March. But this time we mean it, we’ll make a decision before the end of the year.”
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April 27th, 2009 at 11:09 am
Lyle,
I don’t know if this question is relevant or deserves to be asked at this moment. All of this is very troubling for a big corporation like GM. How did GM get there?
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April 27th, 2009 at 11:13 am
Pointiac? really?… GMC=Chevy. They are far to simlar to significantly differenciate, especially among general consumers.
Not only is this ship sinking, its on fire.
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April 27th, 2009 at 11:14 am
Fritz Henderson, on CNBC just now, said that GM has at least 500 dealers that sell less than 50 cars per year. That doesn’t make economic sense. Some of those may sell other manufacturers cars as well to survive.
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April 27th, 2009 at 11:26 am
I am planning to buy a Pontiac G8, I even tested the car, it is freaking is great. What am I going to do now. I really like that car. it is worth getting into one and what will happen in the future with the parts of the car??? Anyone…
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April 27th, 2009 at 11:27 am
#2 Brad says,
GM will not have enough Volts to keep in the showrooms. They will be sold right away.
I think it depends on the economy, price, and consumer desire.
I hope you are right, but we’ll have to wait and see.
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April 27th, 2009 at 11:28 am
#39 Jim Mbongo asks regarding present troubling GM state
“How did GM get there?
————————————————————-
In years gone by GM agreed to long-term contracts and took out loans for large sums anticipating that GM would continue to have high sales volumes and be able to cover these obligations. As GM’s market share has declined, GM has not had sufficient income to pay these commitments. The present crisis is driven in part by a large debt repayment due on June 1, though of course that payment is only one of many now due.
Of course, if one asks why the GM market share has declined, one moves over into a complex discussion of GM vehicles as compared to those of others.
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April 27th, 2009 at 11:31 am
#17 Bearclaw:
On the one hand, the hourly wage costs for UAW workers aren’t that much more than the competition. On the other hand, the legacy retirement and healthcare costs are quite a bit more. On the gripping hand, the insane UAW work rules are a flipping nightmare!
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April 27th, 2009 at 11:40 am
Still a plan for a plan with only about a month to go. Like watching your house burn, it is still there, but you know all is lost.
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April 27th, 2009 at 11:45 am
WSJ online reports as a summary of a much longer article General Motors outlined a revamped survival plan Monday that would leave the U.S. government as its majority owner in return for an extra $11.6 billion in federal aid.
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April 27th, 2009 at 11:47 am
Bob #36:On the one hand, the hourly wage costs for UAW workers aren’t that much more than the competition. On the other hand, the legacy retirement and healthcare costs are quite a bit more. On the gripping hand, the insane UAW work rules are a flipping nightmare!
I know they are trying to reduce the healthcare legacy costs. Is there any way to fix the work rules or get rid of them? Which ones would you get rid of and which would you keep?
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April 27th, 2009 at 12:00 pm
The Volt is a great example of what is meant by the phrase “a dollar short, a day late.”
If Wagoner & Company had had the foresight to prepare for this in the early part of the decade, and introduced the Volt in 2005/2006, it would have been hitting optimal economic production volume just as gasoline was driving towards $4/gallon.
OTOH, I worked at GM in the late 80s/early 90s, and the Union labor rules ARE an economic nightmare. They are absolutely unworkable in a competitive market.
Killing namebrands and dealerships isn’t going to change this imperative.
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April 27th, 2009 at 12:07 pm
Bondholders not happy.
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April 27th, 2009 at 12:12 pm
I am not a “truck person” (yet I am a born-in-the-South southerner; go figure); however, at least the two guys I share space with in the office are. They tell me that many people, especially including the commercial sector, swear by their GMC trucks, even when pitted against their Chevy counterparts.
I think the only way retaining GMC makes sense is if Chevrolet stops selling trucks any larger than the old S-10. Want a truck? Go to GMC. If the market for “lifestyle” country-commuter trucks has indeed dried up, it only makes sense to concentrate on the line which is most purchased by those who really need a commercial-duty truck.
My former Saturn dealer went bust and across the street to another dealership which services many lines, including Hummer; and some lines other than GM’s. Those are the kind of dealerships which will survive this. I can’t imagine this particular dealer closing it’s doors in the sudden absence of Hummer, for example.
The multi-line dealership is the way it’s going to go, I predict; wanted or not: so in the end, it may not matter if GMC becomes GM’s sole Truck supplier; if it’s just a walk down the same lot to look at one.
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April 27th, 2009 at 12:20 pm
#33 Buy the Pontiac. Parts will not be a problem. I drive an Oldsmobile right now. I can still easily get the factory parts.
The parts supply chain is big business. Pontiacs will be supported even if GM disapears completely. Don’t worry.
Enjoy the ride.
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April 27th, 2009 at 12:35 pm
It’s a shame this is all happening just as the new Camaro is hitting the Chevy showrooms. It puts a cloud over everything.
And for those who say GM cars can’t compete against the imports: Go drive a Camaro. The build quality on that car is far better than ANY import car in its price range. It’s f”’n GREAT!
I’m sorry to see Pontiac and the G8 go away. That’s a great car too.
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April 27th, 2009 at 12:41 pm
So HUMMER, Saab and Saturn to be closed out in 2009?
/sarcasm on
How can this be when GM has repeatedly told us so many times about all the potential buyers of these ’storied’ brands?
/sarcasm off
I think I mentioned this about a fafillion times since they first announced HUMMER was for sale over a year ago but if anyone offered a $1 for any of these brands, they should have taken it.
They played the sale of HUMMER, just like most did for real estate…they chased the market down, never accepting the true value of what they had. Waggs had it pegged at 1 billion last June, 750 million by august, then 500 million, 300 million in the fall, 100-200 million a few weeks ago…and now it’s just like so many houses in Michigan, you can have it for a buck just to get you to assume the cost of ownership.
liability>asset
A good chunk of those dealers they want to shed have these nameplates out front. Now they have to pay to make them go away. Today, they should forget trying to sell them, they should be putting a sign out saying they will pay someone to take them away.
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April 27th, 2009 at 1:02 pm
I see this going to CH11 in June, then CH7 a year later. If I was a dealer, supplier, or GM worker, I would be doing some serious job re-training and resume updating right now.
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April 27th, 2009 at 1:05 pm
#16 Adrian:
I would buy a Volt FOR SURE as a Chevy, POSSIBLY as a Buick, and NOT as a Cadillac. So put me down as one in the opposite column.
#22 N Riley & #24 Schmeltz:
Cokie Roberts reported this morning that the President’s approval rating was hovering around 70%, the highest in 20 years. She reported that over 50% of the people polled felt that the country was headed in the right direction, the highest since 2004. I believe that a rising level of optimism in the country is EXTREMELY good news. Does that help?
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April 27th, 2009 at 1:05 pm
#8 – “This type of pathetic behavior would be unacceptable in Japan”
I guess you missed the news announcement when Japan bailed out Toyota.
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April 27th, 2009 at 1:12 pm
Stop the make-model-series-options madness!
The average consumer is overwhelmed by the crazy long list GM currently puts out of makes, series, sub-series, options & sub-options. This complicated product matrix lowers the GM car re-sale value because it becomes impossible for the complex product matrix to get value translated onto pre-owned market places such as cars.com and autotrader.com; this especially applies to options selections.
GM should go down to 3 brands: Chevy (roll GM into Chevy), Buick, & Cadillac.
Within those 3 make brands, each model should be limited to only 2 series options: Basic or Luxury.
Kill the options within each model series!!! Available features should either be included in the Basic series or the Luxury series. Luxury gives you navigation, leather seats, sun-roof, etc. Basic give you cloth seats, power windows, manual seats, etc. Most consumers will welcome making the selection process simpler for them and be OK with having to choose either Basic of Luxury.
Voltec Platform Marketing:
The Voltec power-train should be maketing wise a “Voltec” suffix designator (Examples: Chevy Malibu Voltec, Cadillac Converj Voltec). The advantage here is that once and individual understands the concept of the Voltec power train in one make/model, they will understand how it applies to other GM portfolio makes/models.
I hope GM comes through all this as a lean, clean, and simplified organization.
Related,
I have done consumer research for one of the major computer/laptop retailers. One of the top three negatives we identified with regards to consumers going through the purchase process is that the retailer offers too many options that make the purchasing process overly complicated and cumbersome for the average consumer. Consumers are not sure which way to choose and therefore get bogged down in the complicated matrix of options. Often the perceived value of any one product model gets lost because there is almost no gap between models when factoring available options per each model. Also having to many models to choose from makes the value determination almost impossible for a consumer and they sometimes move on to a competing make that has a more simplified product matrix.
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April 27th, 2009 at 1:29 pm
#47 Noel Park said:
“I believe that a rising level of optimism in the country is EXTREMELY good news. Does that help?”
————————————————————————-
Actually that is very good news to hear that. Perception can be a powerful thing. I could expound on that for a very lengthy post but just don’t have the time, and you probably don’t need the long winded soapbox of the day!
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April 27th, 2009 at 1:44 pm
#33, as #43 mentioned, parts availability should not be an issue. The G8 is made in Australia by GM’s Holden brand. Likewise, I imagine GM will do like they did with Olds and specify other brands as service centers for warranty work. The government will mandate that warranties be honored.
The downside as I see it as unless the G8 becomes a collectors car, resale value will probably be less than comparable cars. If you tend to hang on to cars for 7+ years, this isn’t much of an issue. But if you tend to own a vehicle for less than 4 to 5 years, it will be more of a factor when it comes time to trade it in.
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April 27th, 2009 at 1:44 pm
#47 Noel Park
I thought I saw a Gallup poll yesterday that said Obama’s approval rating was now 62%. While not bad, it is not as good as what you quote from ABC. But, I tend to discount media polls when they come from ABC, NBC, MSNBC or CBS. I don’t know who is correct, but I suspect you could run ten different polls on the same day and get ten different results. Opinions don’t mean much right now. Six months to a year from now, they will mean the difference in a successful presidency and a failing one.
But you are correct, some optimism is at work. At least Obama has stopped talking about how bad everything is. Now if only he would get off the campaig trail and start governing. Well, maybe not. We might like the results of his governing even less then.
I hold out great expectations for a successful conversion of our economy and capitalistic system. One day we will be able to tell our grand kids that we were alive during such great times. Of course, they will not believe us. How could they?
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April 27th, 2009 at 1:53 pm
#50 GM Car Owner
I must say that I agree with most of what you say. GM should simplify their lines and options. Honda doesn’t offer the complex set of brands and options for each of their lines. GM would do well in emulating Honda. I also wish GM to come through all of these as a lean, mean and clean automotive company. I would love to see them learn their lesson once and for all time.
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April 27th, 2009 at 1:54 pm
#50: I think GMC and Chevy trucks have enough inherent brand loyalty that keeping both around is still appropriate. However, the offerings mix should reflect the relative strengths. After the main Silverado, don’t go too heavy-duty on the Chevy side. And on the GMC front, don’t offer any CUVs or any of the other more consumer-oriented vehicles.
Now, as to consolidating trim lines within models, mostly agree except that I’d go basic/intermediate/luxury with the possibility of a sport for some models. Within each trim line you can option it up to the next trim line but no further .. and optioning basic to intermediate should cost more that specifying intermediate from the get-go.
And no more than 2 engine options + hybrid as a 3rd where available. That strategy has worked quite well for Honyota.
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April 27th, 2009 at 2:02 pm
My favorite vehicle brand has always been Chevrolet. But, if it came to it, I would not be opposed to dropping trucks from the Chevrolet line and only carrying them in the GMC brand. I don’t see a problem either way, but to have both brands seems just a little over-kill and somewhat wasteful spending. I suppose GM is thinking along the lines of the Buick, Pontiac and GMC dealers. These three have pretty much been marketed together. With Pontiac on the block, Buick dealers need something else to help bring in customers. That is where GMC comes in. Now it will be Buick and GMC dealerships. I kinda understand GM’s logic, although I don’t necessarily agree with it.
Edited: Those Buick dealers could sell Chevrolet trucks. The Chevrolet dealers would not like that, I am sure. So, GM can not satisfy everyone, so they decided to keep their Buick dealers happy by continuing the GMC brand. I suppose.
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April 27th, 2009 at 2:11 pm
Speaking of the rising level of optimism Noel Park spoke of: I agree. There was a rising level of optimism for a while. But, the fire storm over the terrorist interrogation and the release of only the memos that helped the liberal side of the argument plus the recent problems with a possible swine-flu outbreak has taken the edge off much of the “rising tide” of optimism. It is hard to keep optimism rising against such stories as these. Once we get into these situations, it is hard to find time to discuss the rising level of optimism sweeping the country. The news media knows that “blood stories” sells much better than “wine stories”.
I tend to tune out much of the news these days. I do keep an ear tuned to try to pick out good news stories. They do occur, but they are hard to find.
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April 27th, 2009 at 2:15 pm
I hate to see the brands die, especially Pontiac.
What do you guys think about the possibility of very cheap brand new Pontiacs or Saturns now that this news is announced?
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April 27th, 2009 at 2:24 pm
In the past I have gone to GM’s web site (well, Chevrolet.com, anyway) and was completely turned off by the experience. They make it too difficult to choose options and trim levels. I would much rather they offered trim levels like: LT = basic trim level with good options as base price, XLT = extended trim level with leather and many extra options as base price and SLT = sport trim level same as XLT but with a larger engine and a few “sporty” options as base price. It could just as well be LX, EX or SX or some other code that would designate trim levels. Not the hodge podge they have now. Or combine the Cruze, the Malibu and the Impala as the trim levels. If a customer wanted economy and lower price, but a sensible set of options, they could choose the Cruze line. If they wanted mid-level luxury with more options, they could choose the Malibu. If they wanted top of the line luxury and options, they would choose the Impala. Each of the three different trim lines could offer an SS sport option package as a sporty trim level.
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April 27th, 2009 at 2:24 pm
It will be interesting to see what the “as delivered” price of the Volt will actually be. While there may be an MSRP, I suspect there will be a lot of dealerships marking them up to what ever the market will bear.
I’d put a deposit down now if I could find a dealer interested. Seems like maybe some creative sales dudes might want to make a sales option on a Volt part of a sale now. Buy a POS/ICE GM product now, and guarantee a trade in value toward a Volt. If the terms were right, I might be interested.
And screw Ponitac. GFR.
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April 27th, 2009 at 2:24 pm
Adrian @ 16,
Are you serious? I’ve barely been able to tell Chevy from Buick/Cadillac — the late-80s early-90s version of platform engineering showed me there was no difference between any of them — and that’s when I started paying attention (I’m 30). I’ve noticed that I actually can tell the difference between the lines in the last couple of years, and that seems like a good direction to take the brands — but any differentiation between Chevy/Buick/Cadillac is a totally a new phenomena to me.
But being 30-ish having owned and driven a wide variety of Japanese, American, and German cars, I have to say that the perception that I’d aspire to own Cadillac or a Buick based purely on the brand-marking seems pretty silly to me — they’ve always just been a expensive Chevrolets with slightly bigger seats to me. It looks like this is changing, but there will have to be a lot more turnover in the used-car fleet before I really believe it.
So, I guess GM has years of brand-building ahead if they want those of us who still have hair to care about individual brands…
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April 27th, 2009 at 2:30 pm
#57 Lev
I hate to see brands die also, but we as consumers have a lot to do with the problem. GM goes from one set of customer cycles to another and keeps trying to give us what we want, but can never quite satisfy us. Plus quality suffered so much in the past, we went shopping at the foreign owned brands. Now, many of us will never come back.
I don’t see much effect on the the price of Pontiacs at the dealership. They are offering huge discounts or financing deals now and probably don’t have many other options left to them. You just have to go towards the end of the month and make the very best deal you can. Be tough and don’t forget to tell them that if you can’t make a deal with them, there is always Ford, Toyota or Honda. Be upfront and let them know that you want to buy, but not if the deal isn’t to your liking. You have other options. They don’t.
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April 27th, 2009 at 2:36 pm
#60 Luke
Pretty much true. Trim levels and options plus styling are the only real differences between Chevrolet, Buick and Cadillac. But, that is enough of a difference to make some people put out the extra cash for a Buick or even a Cadillac. I know people who only buy Cadillacs or Buicks and would never stoop to purchasing a Chevrolet. Silly people!
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April 27th, 2009 at 2:41 pm
The first truck I bought was a 1965 GMC 1/2 ton. In those days, GMC was a stand alone brand. At least in our town, the dealer only sold trucks, up to and including semi-tractors and 10 wheel chassis for dump trucks, ASF. They had a clear image of being heavier duty than Chevy.
I went into the dealer, and saw a display they had on the wall. It was an actual crankshaft, rods and piston from the famous 305e V-6, along with same from a Chevy 327 and the equivalent Ford and Dodge. That sold me right there. The GMC parts were easily twice as stout as the competition. Only later did I learn what all of that meant for the fuel economy, LOL!
I think that they are still trading on that reputation,
hence “Professional Grade”, etc. Today however, I can’t see the difference between GMC and Chevy. Maybe they can find a way to resuscitate that differentiation. I dunno. Of course they weren’t a supplement to Buick dealers then either.
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April 27th, 2009 at 2:41 pm
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Viability in words or substance?
It is nearly impossible to change the organizational culture of any business that is larger than 80 employees.
Many aspects of corporate culture that gave large organizations like GM a competitive advantage 25 years ago are today competitive liabilities.
To GM’s credit, the Volt Program and some of the recent model releases do seem to be indicators that GM is making positive organizational changes to adapt for today’s business landscape. But how deep do those changes go? Core or veneer?
Much of what GM has declared it is prepared to do with regards to re-organizing are sometime-in-the-future declarations without detail of execution; basically just kicking the can down the road. Many of the changes they are talking about making would seem only viable vis-à-vis a bankruptcy re-organization because of the resultant legal challenges that will ensue. For example, how is GM without a bankruptcy re-organization going to deal with the lawsuits from each of the thousands of individual franchise dealership owners/principals that will loose their dealerships? What will those ensuing individual and class-action lawsuits cost GM? Where will GM get the money to pay for the multiple armies of layers required to defend GM? How will that contingent liability play into GM’s future stock value and ability to raise credit financing?
I hope GM is able to navigate through all this because America needs the Volt.
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Electic Cars + Nuclear Energy = American Energy Independence!
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April 27th, 2009 at 2:41 pm
Takanobu Ito: April 27th, 2009 at 10:02 am
GM is not a viable corp any longer. The only reason you survive is because you attach yourself to the left tit of your government. This type of pathetic behavior would be unacceptable in Japan. Man Up GM. Do the honorable thing and end yourself now. If you happen to survive prepare yourself for the onslaught of European and Asian high-quality EVs that will make the Volt look like a fool’s tool. Most puzzling is why American people sit back and allow this raiding of taxpayer money happen. GM has flushed billions of taxpayers dollars down the toilet and still wants more. Unbelievable ! This could only happen in America. LOL
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This is truly hilarious. Toyota, Honda, Nissan, and all other major Japanese corporations have always been in bed with the Japanese Government. For those who don’t know anything about Japanese business, this arrangement has long been known as “Japan, Inc.”. The government and corporations work hand-in-hand to defeat foreign competition. Since the 50’s, they have significantly restricted the importation of all American products, including vehicles, into Japan, and worked to undermine and destroy competition abroad.
As far as their “perfect” automobiles go, the sales of Japanese brands have dropped significantly since September, in some case worse than American brands. And in case you didn’t know Takanobu, they all have been borrowing billions from the Japanese government since the start of the current economic situation. Nissan even tried to borrow money from the U. S. government.
What Japan fears most is a revitalized GM, unencumbered by legacy baggage. America works best in a crisis. They may want to remember the words of Admiral Yamamoto, the architect of the Pearl Harbor attack: “I fear we have awakened a sleeping giant, and filled him with a mighty resolve.”
Takanobu , those who live in a paper house shouldn’t throw flaming remarks.
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April 27th, 2009 at 2:42 pm
@Brad 2
GM will not have enough Volts to keep in the showrooms. They will be sold right away.
True, for the first 6 months. When all the folks who have money to spend $37500.00 on a car have bought one, who else is going to buy? They need to time the “Cash For Clunkers” to the Volt consumer release. IMHO.
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April 27th, 2009 at 2:50 pm
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#49 GM Car Owner Said:
Stop the make-model-series-options madness!
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Agreed!
Also, for technical data reasons, the simplified trim/series offerings should be VIN coded. Most of the metric brands do that but not GM.
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April 27th, 2009 at 3:10 pm
Newport @ #65 – I doubt that Takanobu is even Japanese.
NRiley @ #52 et. seq. – Put down the Fox, and slowly back away from the television.
Seriously, can we cut the politics for a while?
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April 27th, 2009 at 3:12 pm
The GreenCar article on this topic had this sentence near the end:
“Very importantly, development and testing of the Chevy Volt extended-range electric car remains on track for start of production by the end of 2010 and arrival in Chevrolet dealer showrooms soon thereafter.”
Note the idea that production does not equate with being in the showrooms. We had seen other reports that implied the cars would be moving out of the factory and heading for the showrooms by a date certain in mid-November.
Is this a change? A slip in schedule? Or more misinformation?
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April 27th, 2009 at 3:13 pm
#33.
buy the G8. I own one and it rocks. Look back at how Olds was handled. GM will/should honor any parts issues. I still expect the G8 to become a Buick Grand National.
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April 27th, 2009 at 3:16 pm
The high drama continues . I don’t want a plug in car , I want the technology to advance . Give me a well equipped mid to full sized car that I can get into and out of easily that has modern technology and safety features but I want it to deliver around 80 to 100 miles per gallon using gasoline .
The Volt looks like vanilla ice cream , it has no sex appeal at all from the front , it is too small for me to get into and out of ( 6 foot 2 inches and 190 pounds with long legs )
Make it with the smallest lithium poly battery pack possible , give it the smallest lightest direct injection high compression four cylinder (500cc) possible gen-set , use a strong bank of super capacitors so it will go like a shot out of hell to 70 mph and I want and be able to use them capture all of my regenerative breaking when I slow down .
Make the seats as comfortable as the cloth seats in my Mercury Grand Marquis . Forget the plug-in , I don’t have the time for that nonsense nor do I want to go through the exercise every day of plugging the darned car in , I want the Volt technology in a high mileage Series Hybrid that uses the capacitors to get up to speed and then travel on the power generated by the gen-set . ( a full sized car can easily maintain its freeway speed of 70 mph with under 25 horsepower )
It would take forever and a day to get to 70 mph with a 25 hp engine alone , that is why you use capacitors , for the power to get up to speed quickly but once there you don’t need them unless you are passing or going up a steep long hill .
Don’t you people at GM know anything about physics and electronics ?
Make good modern cars or go out of business and let BYD replace you .
I don’t want to hear that you are planning to use capacitors in the second edition either , there isn’t any excuse for bad decisions . Do it right the first time .
Make the Volt look attractive , not some stupid Chevy look alike clone thing .
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April 27th, 2009 at 3:26 pm
That being said, for all those who want a Volt I have a statement for you… start praying for bankruptcy. GM run by the government will be dead within a decade. Everything government goes into the toilet at some point, and GM would be no different. Delco went bankrupt, and has come out leaner and meaner. That is what GM needs.
But the new guy was put in place by Obama. I get the feeling the man who never ran anything before (Obama), wants to run a car company.
I stand by my statement. Time and time again, new tech and high equipment sells to the wealthy first (with some exceptions). By their purchases, the costs of fabrication and assembly drop allowing the next tier to buy at their cost threshold. This is why trickle down works, because it just does. If the Volt could be made for a profit as a cheap Chevy, awesome. Do it. Lutz has stated the Volt could have made money as a Caddy (with added bling to be a Caddy). Tesla understands this. When you have a high cost item, you price it to make money. Only game consoles and cell phones work in reverse because the profit is made elsewhere to cover the loss. There is nothing to cover the loss with the Volt. Silly to sell as a Chevy. Should have been at least a Buick with the sweet Lacrosse like interior.
Nuff said.
Go buy a G8 and have fun driving.
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April 27th, 2009 at 3:30 pm
Happily, the restructuring itself is what is causing the Volt to be brought to us in the first place.
Think.
No other OEM is in the position to do this. This is because all other OEM’s are seriously
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DESIGN – ENTRENCHED
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to keep on producing exactly what they are producing.
The reorganization makes GM the “jet-aircraft, in that it will turn around very quickly” because of this.
Other OEM’s do not have this highly-ironic advantage, and, they ALL must attempt to slowly integrate EREV technologies as economically as possible.
Their contractual commitments numbering in the tens of thousands is what makes their slow turn-around for a change-over to EREV’s.
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BUT THIS THEY ALL MUST DO.
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What we are hearing here is the proverbial and FEARFUL “kicking and screaming”, and, it all ought to be dismissed as the classic “loosing” perspective that the poster truly knows it is.
But Voltec EREV technologies are becoming more and more well known each and every day with the deepest of respect from the 367 advanced systems auto technicians who are my customers.
Dan Petit Austin TX,
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April 27th, 2009 at 3:35 pm
If 90% bondholder approval is required for the GM proposal to be put into effect and bankruptcy avoided, it seems to me to be unlikely to happen. Optimistically, maybe chapter something will be a pathway to a new slim company that can produce Volts without so much legacy baggage.
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April 27th, 2009 at 3:36 pm
Hmm, less vulcan looking in that pic, more monopoly banker guy look, just needs the top hat!
GO FRITZ GO, Goodbye Pontiac….
…..
GO EV!
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April 27th, 2009 at 4:23 pm
Anyone read this yet?
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/27/AR2009042700872.html?hpid%3Dtopnews&sub=AR
“The U.S. Treasury would own at least a 50 percent stake in General Motors under a plan the company released today to avoid bankruptcy.
The strategy would essentially formalize the government’s control over one of the icons of corporate America. [...]
Under the outlines announced yesterday, the federal government would take an equity stake of at least 50 percent, the United Auto Workers would take as much as 39 percent, the company’s bondholders would get 10 percent and the existing shareholders 1 percent.”
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April 27th, 2009 at 4:30 pm
Once our government has completed valuable socialist democracy control of GM, we must rename the volt “F3DM” and hope for more happy success.
BYD F3DM Sales Officially Poor
http://www.chinacartimes.com/2009/04/14/byd-f3dm-sales-officially-poor/
/ now where’d my little red book go?
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April 27th, 2009 at 4:36 pm
#77 carcus1 gives link to BYD F3DM Sales Officially Poor
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Interesting that the article talks about problems with the batteries.
As we’ve noted many times, good auto batteries are not easy.
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April 27th, 2009 at 4:39 pm
#68 MarkinWI
“NRiley @ #52 et. seq. – Put down the Fox, and slowly back away from the television.
Seriously, can we cut the politics for a while?”
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To repeat a slogan: “Yes, we can.” That comes from the Dora the Explorer cartoon series. I was just responding to a comment about optimism and what caused it to rise before being over come by more powerful media events. Sorry if anyone took that as talking politics. It was not intended as any thing but my view about the feeling of optimism some of us had begun feeling before the latest round of bad news stories.
And, I was not holding onto any fox- natural or media. I watch mostly science, history and discovery channels plus NBC and CBS nightime 7 – 10 p.m. lineup.
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April 27th, 2009 at 4:43 pm
This is not a slip in the production schedule of the Volt. GM has been saying pretty much all along that they would start production in November 2010. Most of us assumed there would be Volts in dealer showrooms in November 2010. And there will probably be a few and certainly more by the end of December 2010. No big deal either way.
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April 27th, 2009 at 4:44 pm
@carcus1 77
Looks like per the article it is not available to the GP yet. The buyers mentioned were all large biz. It sucks though that the battery pack takes 9hrs to charge. And aren’t their household outlets 220VAC @ 30A?
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April 27th, 2009 at 4:45 pm
Hey guys, I have to ask again (because nobody answered las time), isn’t the 2010 release only for target of large organizations and not for the GP?
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April 27th, 2009 at 4:49 pm
Poor BYD. Unfortunately it will take a lot of work to have success with EREVs in the Chinese market.
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April 27th, 2009 at 4:55 pm
#39 Jim Mbongo
There are numerous reasons why GM is in this mess, and too much blame to go around. Basically, the unions were slow to adapt (you can’t fight technological unemployment without rendering a company obsolete), the legacy costs are high (retirement at 48 is unsustainable given the current life expectancy), and the US government was beyond unhelpful. (The dollar’s reserve currency status places American industry at a disadvantage. Most foreign governments pay for health care, pensions, etc. And most countries give tax breaks for exports. Instead, we tax them.)
Yes. Management has made many mistakes–brand proliferation, the Fiat partnership, zero financing after 911, etc. And all three major domestic companies built very poor quality vehicles in the 80s and 90s in an effort to maintain profitability. And they’re still paying for that. (Toyota can generally get $2000 more per car.) But the domestic auto industry is still around when many of our other industries have failed. I think they deserve some credit for that.
#72 Adrian
The problem is that GM originally saw the Volt as a public relations tool, not a profit center, and priced it accordingly. A $40,000 Chevy is much better for publicity than an $80,000 Caddy. I think they’ve since changed their minds–hence the Converj. But now they’re stuck with building the Volt first when they’d be much better off the other way around.
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April 27th, 2009 at 4:57 pm
“NRiley @ #52 et. seq. – Put down the Fox, and slowly back away from the television. Seriously, can we cut the politics for a while?”
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MarkinWI – If you disagree with my comments, refute them. Don’t attempt to marginalize me by saying “put down the Fox”. There was nothing political in my comments.
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April 27th, 2009 at 5:04 pm
Just as a example of what GM is worth, and by extension the ‘greater value’ of the ‘lessor’ brands – Saab, HUMMER, Saturn, Pontiac etc.
Daimler just ‘reached a deal’ on its last 19.9% of Chrysler (so we can call them the ‘Big 3.0′ again…at least for a couple days).
I’d like to say Daimler sold its remaining 19.9% share, but that would be wildly inaccurate…they paid about 700 million to get Chrysler the heck away from them. (Well technically, they just wrote off a half a billion in loans Chrysler owed them and agreed to pay 200 million into the Chrysler pension fund.
They had already written Chrysler’s value down to zero months ago…I guess they over estimated a bit
/all that just for the pleasure of disassociation
http://finance.yahoo.com/news/Daimler-reaches-deal-on-final-apf-15046308.html?sec=topStories&pos=2&asset=&ccode=
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April 27th, 2009 at 5:04 pm
I have a Nostredamous vision coming…..
……
……
The price of the Volt will be$34,500.00……..(gasp!)
……
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Plus the $5000.00 expected “Cash for clunkers”….
…..
…..
For a total of $39,500.00 (yes…..lol, below $40K will be the claim)
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April 27th, 2009 at 5:04 pm
#81 CaptJack
Seems like a lot (most?) of the world is 220v. I would think their amp rating would vary just like our wiring does, but I’ve never really thought about it. If I’m traveling about all I ever plug in is my phone and my laptop. Never been to China.
http://www.kropla.com/china_power.htm
I’m thinking the F3DM and batteries must be pretty bad.
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April 27th, 2009 at 5:07 pm
Also, the bondholders are already out with their statement on the offer:
Nutshell: Suck it, we will see you in hell! (Or at least in bankruptcy court, which is pretty close to the same thing)
===================
Representatives of the bondholders, who had sought some parity with the treatment of the UAW’s unsecured claims, said in their statement that GM was on a risky path to bankruptcy.
“This offer demonstrates that the company and the auto task force, unfortunately, are pinning their hopes on an extremely risky and legally questionable turnaround in bankruptcy court, instead of engaging its lenders and workers in the very type of negotiations that could avoid such a fate,” they said.
http://www.reuters.com/article/marketsNews/idUSN2718117520090427?rpc=44
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April 27th, 2009 at 5:07 pm
GM’s will not avoid bankruptcy. The bondholders have the high cards in this amusing, but predictable, poker game.
The answer lies in the many credit default swaps sold that bet heavily on GM’s demise. The bondholders have no reason to agree to a deal that gives them nothing, but reduces their priority for repayment if any assets are liquidated. The swaps guarantee the bondholders that they’ll at least get something, if not 100%, of what they’re owed.
As pointed out above, the “recapitalized GM” would in essence be a tool of Obama and the unions. If I have priority for repayment over the common shareholders now, why would I trade places with someone two or three places behind me? GM’s bankruptcy, as I’ve long maintained, is overdue, well deserved and inevitable.
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April 27th, 2009 at 5:08 pm
@carcus1 88
Furthest I ever went was Hawaii.
Aw man, I loved the Pina Colada’s, Mai Tai and the Germains too good to miss Luau!
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April 27th, 2009 at 5:13 pm
Noel Park @ 63
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I had a ‘65 GMC pickup. It was a somewhat rare 3/4 ton longbed STEPSIDE. And it had the mongo 305 ci. V-6. Massive torque. And it had an external oil filter the size of a #10 can. Built to last, and it did.
I hauled a house in there, literally. I built a 2000 sq. ft. house as a young man and carried virtually all of the materials home in that truck.
Plus, I built a barn and a three car garage with the same truck.
Good ol’ American work trucks. Nothing like them.
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April 27th, 2009 at 5:29 pm
91 CaptJack,
Time for 40 seconds of Hawaiian nature appreciation. . .(sure beats lookin’ at Fritz’s mug)
http://www.youtube.com/watch?v=A2V39Itlq28&feature=related
….yeah, buddy
been there a couple times, didn’t want to come back home.
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April 27th, 2009 at 5:32 pm
ps. Just a reminder. I think it would be a good idea to not even acknowledge the sociopath who is pretending to be a Japanese auto executive. He goes by various names, but it’s always the same fascist/nazi-speak calculated to demoralize everyone and to divert the thread away from productive, informative, fun conversation.
GO GM!
GO VOLT!
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April 27th, 2009 at 5:32 pm
ArkansasVolt #1
Your right, this does confirm the plan. I’m sure government planners suggested this to GM for loan guarantees.
But I’m also sure the Volt will be in showrooms at some level by Nov next year. (18 months from now). Some would say a long 18 months but I say only 18 months.
I think its impotant for folks to quit fussing about the details and enjoy the countdown.
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April 27th, 2009 at 5:34 pm
#74 RB
I doubt this offer will get anywhere unless the government plans to throw its weight around. And even then 90%? No way.
Right now, the bondholders hold 27 billion worth of bonds, and in exchange they’re supposed to accept 10% of the new GM? Meanwhile the UAW gets 39% of the new GM plus $10 billion new debt in exchange for their 20.4 billion obligation? Am I the only one who sees something wrong with this picture? Hopefully, this is just an opening offer.
http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=GM%3AUS&sid=az7u0.vEPsYM
http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=GM%3AUS&sid=aQdI.nZJ3C3o
I agree that there are definite advantages to a bankruptcy. For one thing, it would protect them from dealer lawsuits after they shut down brands. But for a company as large as GM, it’s very risky. And there’s no way it wouldn’t delay the Volt.
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April 27th, 2009 at 5:34 pm
@carcus1 93
YEAH BOOOOOYYYYEEEEE!!!
Yup, just how I remembered it, eventhough I was drunk.
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April 27th, 2009 at 5:42 pm
zipdrive #94
the guy is totally laughable, whether he’s Japanese or not. His Toyko Rose imitation is right out of the old war movies. It sounds like static in drag.
C’mon static fess up.
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April 27th, 2009 at 7:10 pm
I see a number of reductions for the workers. They will lose jobs, have reduced hourly wage, and reduced benefits.
What will the executives be asked to give up?
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April 27th, 2009 at 7:17 pm
I just saw a short comment by Mr. Henderson on the news.
He’s direct, candid, practical, and on-the-level. I think Mr. Henderson will serve GM extremely well, and, pull-through to get us our Voltec vehicles. I’m sure he will not let the slightest bs get in the way of our EREV’s.
Dan Petit Austin TX,
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April 27th, 2009 at 7:29 pm
What’s the saying about trying the same failed approach again but expecting different results?
Sit all stakeholders down to a closed door “settlement” meeting or just call this what it is, a pre-bankruptcy dance.
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April 27th, 2009 at 7:30 pm
#90 Bernie Torbik:
Who is to say that these magic credit default swaps will ever pay off? Aren’t the people who issued them in pretty bad shape too? AIG???
#93 carcus1:
Beats the h__l out of the photo of Fritz at the top of the thread!
#94 zipdrive:
Yeah, FUD defined.
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April 27th, 2009 at 7:43 pm
#96 LauraM — on the bondholders and potential for bankruptcy
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Thanks for the comments. Very informative. There is obviously disparate treatment of the bondholders as compared to the UAW.
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April 27th, 2009 at 7:44 pm
I’ll bet that as everyone gets to hear how “down-to-earth” Mr. Henderson is, that you will all get to appreciate him. I hope the media gives him an opportunity to be heard more often than they have been allowing or have been interested. I get a sense of confidence and a sense of clearly-viewed direction and outlook from his tone of voice.
You might find the same attributes as I do if you have an opportunity to be able to listen to him.
Dan Petit Austin TX.
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April 27th, 2009 at 8:24 pm
@90
I just wonder how many billions are bet against GM with credit default swaps….
And more importantly, who would be liable if they are called in with a GM default? Uncle Sam may have to pay twice as much with a default if he is guaranteeing the insurers of the swaps.
Just Wondering
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April 27th, 2009 at 8:33 pm
GM is heading for bankruptcy, and possibly into a two entity split. One that goes through bankruptcy fast (the money making parts of GM), and another that stays in bankruptcy for a while (the losers). Guess where the Volt would go? Yeah, it’s not going to make money in the foreseeable future.
Bankruptcy is bad news for the Volt, and we all know that’s where GM is going to end up.
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April 27th, 2009 at 8:47 pm
CREDIT DEFAULT SWAPS
http://www.youtube.com/watch?v=bHXuUx0vT0Q
The smoking gun of this whole freaking mess!
Thanks Washington, thanks Wall Street.
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April 27th, 2009 at 8:53 pm
If there is a reduction in brands, does that mean they can retool some of the factories to build more of the cars people really want? You know, having 2 factories pumping out Camaros and VOLTs…?
And wouldn’t that put more factory workers back to work too? Instead if shutting down Pontiac and Saturn plants, get them converted to build cars not on the chopping block.
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April 27th, 2009 at 9:01 pm
#102 Noel Park – Who’s to say the credit default swaps will pay off, and aren’t the people who issued them in bad shape, too? AIG?
#105 Red HHR – Who would be liable if the swaps are called in?
The short answer is that the bondholders are betting that Uncle Sam will have to pay off the swaps, as many were issued by AIG. As to who’s liable, if you guessed the taxpayer, you guessed right. All the more reason the bondholders won’t take the lousy deal offered by GM.
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April 27th, 2009 at 9:09 pm
http://www.marketwatch.com/news/story/UAW-own-55-Chrysler-WSJ/story.aspx?guid=%7BB0605918-6344-4A2E-AD2A-F5861A24B7A6%7D
Take Care
Arch
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April 27th, 2009 at 9:22 pm
#96 Laura M said:
I doubt this offer will get anywhere unless the government plans to throw its weight around. And even then 90%? No way.
Right now, the bondholders hold 27 billion worth of bonds, and in exchange they’re supposed to accept 10% of the new GM? Meanwhile the UAW gets 39% of the new GM plus $10 billion new debt in exchange for their 20.4 billion obligation? Am I the only one who sees something wrong with this picture? Hopefully, this is just an opening offer.
http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=GM%3AUS&sid=az7u0.vEPsYM
http://www.bloomberg.com/apps/news?pid=conewsstory&refer=conews&tkr=GM%3AUS&sid=aQdI.nZJ3C3o
I agree that there are definite advantages to a bankruptcy. For one thing, it would protect them from dealer lawsuits after they shut down brands. But for a company as large as GM, it’s very risky. And there’s no way it wouldn’t delay the Volt.
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I completely agree with you, this offer is ridiculous….and put together with this new plan to chop 3,000 dealers short term (and the cost implications) it is huge flashing neon sign saying we are going into C11/GSB.
Just as a point of reference to add on, we have already seen the magic number that bondholders are willing to accept on the low end with Ford…and that is around 40 cents on the dollar, give or take a penny.
Only reason Ford is not in with the other two, is because they mortgaged all their stuff (even Baltic Avenue) before this mess hit (points to the executive on that one), but that also means their bondholders have the least to gain if they were liquidated, and are theoretically the most open to a lowball offer.
I figure the GM debtholders want something like 40% (gov’t guaranteed) + 10% equity.
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April 27th, 2009 at 9:25 pm
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#105 Red HHR Said:
@90
I just wonder how many billions are bet against GM with credit default swaps….
And more importantly, who would be liable if they are called in with a GM default? Uncle Sam may have to pay twice as much with a default if he is guaranteeing the insurers of the swaps.
Just Wondering
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Wow…good point…very good point…that situation may set a new FUBAR standard.
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April 27th, 2009 at 9:31 pm
I don’t feel much sadness over the loss of Pontiac. A few people like the G8 and the Solstice, but their numbers are small. Most of the other great models from Pontiac were produced decades ago. I never owned a Pontiac, so I don’t even feel much in the way of nostalgia for the brand. If getting rid of Pontiac helps GM survive, then it’s time for it to go.
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April 27th, 2009 at 9:44 pm
#108 Corvette Guy said:
If there is a reduction in brands, does that mean they can retool some of the factories to build more of the cars people really want? You know, having 2 factories pumping out Camaros and VOLTs…?
And wouldn’t that put more factory workers back to work too? Instead if shutting down Pontiac and Saturn plants, get them converted to build cars not on the chopping block.
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Not likely. The problem is the market has already eroded about 50%.
The Camaro plant, which is close to my hometown is on the new Zeta rear-drive platform architecture and the plant they built is huge, and has ridiculous capacity. It was designed to produce 100,000 Camaros a year and another 400,000 RWD ‘other’ cars, which has gone from 5-6…to just the Camaro.
Side note: This is in my backyard…we have had tons of Camaros zipping around for months before the release: http://www.camaro5.com/forums/attachment.php?s=6a9cecb0e8d7a7b19640879e3e76f5da&attachmentid=16856&stc=1&d=1236478031
(props to Camaro5)
The problem with the Volt capacity is the battery. One assumes they could increase Volt capacity (sans battery) pretty easily, relatively speaking, as the Delta II will be in two factories in the US (Hamm/Lordstown), and already in the EU and Asia/Pacific.
Only difficulty would be some very specific machining for the line swap/conversion…probably a 18 month conversion time, 12 if they pushed it. Even though it is a ‘flex’ line, and the Volt is off of the Cruze platform, I don’t think the Volt would fit the criteria here…it would be all or nothing.
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April 27th, 2009 at 9:56 pm
#114 Statik said:
Not likely. The problem is the market has already eroded about 50%.
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I meant for that to read as “not likely they would need to do it” The problem is the market has already eroded about 50%….
/sorry about that
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April 27th, 2009 at 10:04 pm
FUBAR, now there is something I understand…
It will be interesting to see what comes out of all of this…
Nobody really knows, or do they? How many swaps are out there.
The answer could make the results predictable.
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April 27th, 2009 at 10:10 pm
Gosh,
If, I had a job….. Near home…. I would buy me a red Camaro.
Very nice picture Statik.
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April 27th, 2009 at 10:12 pm
Statik #111
“Just as a point of reference to add on, we have already seen the magic number that bondholders are willing to accept on the low end with Ford…and that is around 40 cents on the dollar, give or take a penny.
.
.
I figure the GM debtholders want something like 40% (gov’t guaranteed) + 10% equity.”
It doesn’t really matter what the bondholders want or what the Ford bondholders got. All that really matters is what they think they can get from C11 or any ensuing litigation (aka what their lawyers say they can get), and what GM/Gov believes they’ll accept. GM/Gov should make an honest appraisal of what the bondholders could get and be willing to negotiate up to a little more. This is the best way for an agreement to be reached and it can probably only be accomplished at the negotiating table with all major stakeholders present. Sit down, reach agreement, or go C11.
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April 27th, 2009 at 10:28 pm
#117 HHR
“Gosh,
If, I had a job….. Near home…. I would buy me a red Camaro.
Very nice picture Statik.”
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Funny, I was thinking along the same lines.
But more like : “If I can git the financin’ I’ll be drivin’ 422 thunderous ponies of pure mullet tossin power straight back to the double wide!
YEE HAAAAAW!!
*it really is a good looking machine
* mullet = camaro cut
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April 27th, 2009 at 10:41 pm
Camaro Song
http://www.youtube.com/watch?v=tdegQmtgFSM
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April 27th, 2009 at 10:47 pm
#119 carcus1
Dang, you got that right. I would be happy with the six and steel wheels though. If they only had one at the dealer the day before I got laid off…. Shucks
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April 27th, 2009 at 11:03 pm
#121 HHR,
Well, at least you still have your mullet. For now you can forget about “business up front” and concentrate on “party in the back”.
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April 28th, 2009 at 1:17 am
Pontiac is my family’s favorite brand. It’s too bad really that
Pontiac is going away, but I guess the Pontiac image isn’t
exactly green. This is unfortunate, the 1992 Bonneville we
had got 31 miles to the gallon. If that isn’t good gas mileage,
I don’t know what is.
The Volt gas/electric hybrid is a mistake, but every time I
say this my comments mysteriously disappear off these
boards. When I vote with my wallet for the first commercial
fuel cell car along with millions of other people, GM will get
the message! A small Lithium ION battery coupled with a
fuel cell and hydrnol reformation system or Magneisum
Hydride Slurry reformation system now please! Hybrids
are not a solution to dependency on foreign oil, they are
a thin and very expensive band-aid.
Why GM? Why are you scrapping my favorite brand?
By 2015 GM you had better get a hydrogen fuel cell car
on the market that reforms a safe hydrogen carrier or
you will be dead. Come on GM, if Mercedes can predict
a $30k hydrogen car in the not too distant future you can
certainly do better than that.
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April 28th, 2009 at 4:54 am
STERLING HEIGHTS, Mich. (AP) — The United Auto Workers union will own 55 percent of a restructured Chrysler LLC.
nuf ‘ said
=D~
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April 28th, 2009 at 8:25 am
http://www.bloomberg.com/apps/news?pid=20601087&sid=aRgY68o56to8&refer=home
If the talks of the government and UAW owning the majority share of GM are true then I will never buy another GM vehicle again. I have been a loyal GM owner since I started driving but if the government runs the company forget about it.
I know I am not the only loyal GM owner that feels this way. This is the worst move GM could make and will be the end of the company.
Good bye Chevy Volt and good bye GM.
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April 28th, 2009 at 8:38 am
I have to agree with JT and others. With the “inmates running the asylum,” I will no longer consider a GM vehicle…Volt or otherwise. The same can be said of Chrysler if the news I am reading turns out to be correct and they are in the same boat. It is sad to think that I will have to limit my choices to either Ford or a foreign model, but that’s exactly what I will do.
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“Who is John Galt”
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April 28th, 2009 at 10:04 am
If it is true the UAW is going to get 39% of the new GM, that will be the last nail in the coffin. I will become a Ford customer for future vehicles. I don’t like the idea of the government or the UAW owning any part of an American business. Period.
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April 28th, 2009 at 12:08 pm
Why does GM make so many brands if they can’t handle them?
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April 28th, 2009 at 12:32 pm
There really shouldn’t be any Volts in showrooms with nearly 50k people on the waiting list. Unless those Volts aren’t for sale, but GM would run the risk of making enemies of their staunch supporters.
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April 28th, 2009 at 12:34 pm
Just bought the new ford fusion hybrid as I need a new car -not vaporcar. Who knows when the volt will get to the NW. GM is stealing my unsecured bonds by over half what they are giving to the unions. To bankruptcy they will go as that will force equal consideration to all legal debt. The unsecured bondholders will not agree to this restructuring farce and will seek their day in court. Good luck getting a volt by 2011.
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April 28th, 2009 at 1:22 pm
The Volt program is still a go , that is NOT saying that a car called the Volt is going to be produced by November , it is just saying that the technology continues to be developed and maybe just maybe it might be something else that is released first to the public.
Think about it for awhile , if you were going to be approaching your money lenders and shareholders after you restructured your company , do you think that they will want to hear you tell them that you want to make a product that is guaranteed to make them continue to loose money . I think not .
Now if you were to tell them that with a few little changes like front fenders , lights , bumper , rear end , and hood that you can sell that same product and make a profit right from the beginning I think the share holders would be happy to see the second product be manufactured and called the Converj .
Make an announcement saying that the Volt as a Chevrolet is too expensive right now , but we are working on ways to bring down the costs without sacrificing the quality and performance for the working man .
This technology is as important to automotive transportation as the Industrial Revolution was to the world away back when it happened .
Maybe the Cruze will come out as the Volt in shorter driving ranges on batteries like 10 to 40 miles as intended but ten miles would be the basic model with 20 – 30 – 40 miles being extra options maybe with a 60 -100 mile pure electric as the top option without any gen-set just more batteries and capacitors up front .
This is the way that vehicles will go anyway so maybe we should have a little faith in the people who are running the R&D departments and the Marketing Departments .
We will get our Volts sooner or later , just don’t be too surprised if the first ones produced are called Cadillac Converj .
There are many more people who have a high income and enjoy status and class who can afford a $60,000 Cadillac Converj than there are working class who can afford a $35,000 Chevrolet Volt .
Not very many people with the means to buy a Cadillac would want to have a Chevy parked in their driveway even if it was the kids car , Chev just does not fit with Cadillac , Lincoln , BMW , Mercedes , Audi etc .
GM doesn’t tell us everything , some people just believe and think that they do .
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April 28th, 2009 at 1:35 pm
The local NPR affiliate reported this morning that 73 Pontiacs were sold in LA county in the 1st quarter of 2009. As a contrast, they reported that 3700 Hondas were sold.
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April 28th, 2009 at 6:42 pm
Is thier any chance that GM will sell Pontiac. I think Pontiac has so much potential that GM doesn’t see. If Only I had the money to buy the brand and a couple of their plants they are shutting down. I think Pontiac on its own would do well and could have its name restored to what it once was.
Jay,
Alabama
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May 1st, 2009 at 1:09 am
Another example of General Motors terrible decision making. Keeping Chevy and GMC they are exactly the SAME!!! Maybe they have to keep GMC because that division makes industrial equipment. But seriously, I mean if you are old enough to consider even buying a Buick or have the 45,000 dollars to do so…make people BUY THE GD CADILLAC. Pontiac was the only thing they had that worked for dual gender demographic, middle aged to youth, and the possibilities were infinite for that brand. That could have been their risk taking venture, classy or stylish and customizable like Scion is for Toyota…too bad. Dumbass GM
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May 3rd, 2009 at 6:30 pm
GM should hold on to either the 2 seater SKY or the Pontiac little 2 seater (I forget what it is called). Either of them would make a great Plug In Electric with lots of mileage. Someone is already do the Sky and getting almost 150 miles per charge. This would make a great little nich car and I think would sell better than the Volt (if you don’t have kids). The Volt is nice but a 2 seater sports convertible is more desirable. With the kind of mileage you can get you don’t need the range extender. This would give GM 2 options to sell.
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October 20th, 2009 at 1:56 pm
i agree GM has really messed up over the years,
they went from good to seriously bad,and steady making bad choices, and pontiac was the only company that i actually liked and GM found away to mess that up to and now eliminate iT,GM you really should stop making cars becouse you guys plans are messed its bad that ford is doing better then you guys are.GM is another reason to make america look bad
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