GM CEO Ed Whitacre’s Tall Claim

Take a look at this recent GM commercial where new CEO Ed Whitacre introduces himself and the 60 day money back guarantee on all GM cars.  He says “before I started this job, I admit I had some doubts, probably a lot like you but I like what I found”  He goes on to say, “I know that if you get into one of our cars you’re going to like what you see…car for car, compared to the competition, we win”.  That is a tall claim by the 6’4″ Texan.

Consumer Reports recently completed a car for car comparison and could only recommend the $28,000 Chevy Malibu, the $38,000 Buick Lucerne, and the $48,000 Cadillac DTS, none of which earned best in class designation.

Speaking of the Chevy Malibu, you can buy a ’09 which gets 33 MPG HWY starting at $21,000 or the $25,000 hybrid version which gets 34 MPG HWY.  4 grand more  for 1 extra MPG. What a great deal!

Mr. Whitacre likes what he found, but I wonder if he has driven any of the cars.  At 6’4″ could he even get into the new Chevy Spark, Chevy Sparkwhich will be available in the U.S. in 2011?  By the way, Consumer Reports labels the Spark a standout in its new car preview section.  That said, if he could get into the Spark, Whitacre might find that his head hits the roof and his knees touch the steering wheel.  I think a little spark would go off in his brain and he’d say, “dang, this ain’t no Cadillac.”  I hear he’s a Cadillac man.  Good thang!

60 day $ back for GM – why not 60 weeks?

Chevy Camaro

I like Chevy’s.  I grew up with Chevys.  My parents bought Impalas in the 60’s and 70’s.  And in 78, my dad bought a Camaro, which became mine, and in 1981, my mom bought a 4 speed manual Chevy Vega.  The shifter was a little cranky and we had to practically stand up to get the clutch down, but I liked driving it.

Unfortunately, Chevy has gone downhill since the 80’s.  The only car in their lineup I would even consider buying today is a Malibu, but for the same price, I could drive home a Honda Accord or a Toyota Camry.

So desperate is GM for new car sales, they are now offering a 60 day no questions asked money-back guarantee on new 2009 or 2010 cars.   If you don’t like your new car purchase within 60 days, bring it back for a full refund.

Here’s the problem.  60 days is not enough time for much to go wrong with a new car. If something were to go wrong, the car would be under warranty.  Instead of 60 days, GM should offer a 60 week guarantee.  Don’t like your car after a year or so, take it back for a full refund.   If you decide to keep it, get free routine maintenance for an additional year.  That would drum up sales… and probably sink the company.  What do I know?  I work for a non-profit.

Bail Out the Big One – GM

The Big Three want a bailout – to be rescued from their own incompetence, demanding immediate loans – a little slice of the 700 billion pie.  Interestingly, in two week’s time, their demands went from 25 billion to 34 billion.  With the new Jobless Report out signaling the worst numbers in 34 years, the Big Three just got the big break they needed to compel Congress to dole out the loans.

hummerThe “rescue” loans are on top of the 25 billion they have already been promised by Congress to help meet fuel efficiency standards.  However, it’s not clear when these monies will be released.

Ford seems to be along for the ride; they don’t need a loan, but would like to have 9 billion just in case, according to a NY Times editorial.  Hey, I’d like to have a little 9 billion cushion just in case I lose my job or miss my mortgage payment or fall behind on my daughter’s future college tuition payments.  Ford, do us a favor – go home.

Now, what to do with the Big Two?

GM has proposed to do away with product line, the details of which have not been disclosed.  I have some suggestions for GM that I think would help the company become solvent.  First, do away with Buick, Pontiac, Oldsmobile and GMC.  I never understood the difference between Buick, Olds and Pontiac anyway; there are simply too many overlapping models,  the majority of which have proven to be unreliable.  Eliminate the 14 mpg Hummer, which means lobster in German, and sell SAAB to Ford or back to the Swedes.  Keep only Cadillac, Chevrolet and Saturn.  Turn Saturn into a hybrid and plug in factory.

And why doesn’t GM sell its Opel or Vauxhall lines in the States?  Not that I would, but some might chose an Opel over a Toyota.  The Agil, below, looks a lot like a Yaris.  Any Europeans out there with an opinion on GM’s European lineup?opel-agila-2008-700815

Cadillac should make but two cars:  the CTS and the Escalade Hybrid –  that’s it.  Stop production of all others.   Chevy should only make the Cobalt, the Impala, the Silverado pickup, and a Van, and eliminate all  crossovers.  No sporty versions of anything.  Goodbye Corvette.

chevy-corvette-stingray-posters

There should be a gasoline and hybrid version of each model.  The gasoline models should get 35 – 40 mpg and the hybrid models 40-60 mpg.  New plug in models like the Volt should also be developed and sold under the Chevy brand.

Who owns Chrysler, Jeep and Dodge anyway?  The German Daimler group sold 80% of its stock to Cerebus Capital Management Group.  I don’t consider a management group an automaker, so we should not bail them out.  Anyway,  Chrysler, Dodge and Jeep models are some of the least reliable cars sold in America and I have no faith that a management group could turn around a car company with a quick loan in this economy or in any economy for that matter.

Obviously, the potential of Chrysler failing and GM and Ford’s restructuring plans will mean plant closings and massive layoffs.  However, laid off workers could be reemployed immediately in Obama’s Public Works Campaign, which will require expertise at all levels.  Those who are not keen on public works could work in the public education sector.  Following the model of Teach for America, dislocated workers could become certified K-12 or Adult Education teachers and work in urban and rural school districts or with community based organizations.  And there’s no better investment than an education!