Chevy Malibu, the Future of GM?

Back in December, GM received a 13.4 billion life-line loan from the government; Chrysler, 4 billion.  As a condition for the loans, the companies had to submit detailed viability plans on February 17 to a task force headed by Treasury Secretary Timothy Geithner and economic advisor Lawrence Summers, co-car czars or chief car czarists, if you will.   I don’t know if this is a good idea, but I hope that two heads are better than one.

It comes as no surprise that the cornerstone of each plan is a request for  more money – GM needs 16.6 billion more and Chrysler, 5 billion.   In addition to an infusion of cash, both GM and Chrysler plan to cut more jobs, close plants and stop producing unpopular models (code for crappy cars).  GM and the the United Auto Workers (UAW) have made progress in negotiations regarding work rules, wages and a health care plan for retirees.  GM issued a press release announcing its viability plan.  The full 117 page text of GM’s restructuring plan is available here in a pdf file.

If I could give advice to this task force, I would say the following:

No more cash until GM eliminates most of its product line.   GM has a proven record of building horrible cars.   Only the Chevy Malibu, the Pontiac Vibe and the Saturn Auro received Consumer Reports highest rating for new cars.   Despite the Auro accolades, I would eliminate the Saturn line completely.  Saturn cars have been ok and the idea of no haggling sales has always appealed to me, but the brand never took off and failed to revolutionize GM as hoped.  All other GM models – all of them – the Astro, Aveo, Impala, Camaro, Lumina, Equinox, Cobalt, Traverse, even the Corvette should be discontinued.   I would also urge the task force to demand GM eliminate GMC, Pontiac and Buick as they do nothing more than duplicate the bad cars GM makes under a different name.   The evil twin concept.

I’d repackage the Pontiac Vibe, a Toyota Matrix clone, as a Chevy and keep it.  The car is produced at a joint Toyota-GM facility in California; this sort of collaboration should be encouraged.

And the Cadillac brand, why even bother – its glory days are long gone.   GM should only be allowed to produce three cars –  the Chevy Malibu, the Vibe and the electric Volt;  and one pickup truck –  the Chevy Avalanche;  nothing more.  Consumers who want a a cheap, reliable truck can buy a Toyota Tacoma;  those who need a family van should look to a Toyota Sienna;  and sports car enthusiasts should consider the Mazda Miata.

GM should be forced to sell all its other assets including SAAB,  Vauxhall, Opel, Daewoo, Holden and Hummer to the highest European or Asian bidder.   With all of this baggage, it’s no wonder GM cannot turn a profit.

Such a plan would mean a substantial number of layoffs as plants shutter and GM downsizes, but this may be the only way GM can survive and eventually thrive to employ a  future generation of workers.  GM already recognizes the need to become leaner by announcing the layoff of 47,000 workers as part of its viability plan.

GM’s ace in the whole may be the Chevrolet Volt, the plug-in battery powered car that is set to debut in 2010.  If the Volt proves a success, GM could become the leader in hybrid battery technology for the auto industry and remain viable for years to come.

Oh and Chrysler.  Sorry, it’s over.  No more money for you. If I could advise Chrysler, I would say go find Lee Iacocca.  And if I could advise Mr. Iacocca, I’d say, Lee, revive AMC – bring back the Gremlin and Pacer and make that Chrysler Diablo concept car a reality.

One Response

  1. Very good article and I’m sorry for the late response. Just ran across it. The shame about Chrysler is that a truly innovative company that did remarkable engineering for the good of the industry could be in this condition. From the early days of the Airflow, while widely criticized but none the less a clear predictor of the future, to the cab-forward design of the nineties, equally remarkable in its mechanical layout efficiency, the company was always a significant contributor to the uniqueness of the American automobile industry. True vision and at times, gifted insight. At the risk of sounding mystical or metaphysical, it takes a “car guy” to run a car company and you can’t orchestrate the construction of a complex product that moves people from one point to another from the financial world alone. Cerberus never fully understood that.

    Thx: Gail

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