GM & Ford bonds rated as Junk, what effect on the industry?

:wink:

Just FYI: The maturity schedule came from GM’s latest 10-K, section II-56, Note 15: “Long term debt and loans payable”… if GM is lying on their SEC filings, well, nothing I can do about that.

Not being involved at all in large corporate finance, I’m just going by basic back-of-the-envelope calculations, GM’s published figures, and some assumptions. I’m totally aware that I’m really simplifying things (a nicer way of saying that I’m pulling some of this out of my ass :wink: ), which is why I really appreciate the info in your past two posts. :cool:

Let’s not even go into the fad GM had for hiring people from outside the automotive industry. There is a difference between designing and selling toasters and designing and selling automobiles. People who have no interest in automobiles except as generic product will not do a good job. My father recalls being told there was no difference between designing a toaster and designing an automobile.

I’ll be over there, whimpering.

GM is all kinds of deeply effed up. All kinds. Ford may be effed up, but it’s honest and well meaning, as opposed to the blind lurchings of a six headed worm seeking either the sun or the sea, and not sure which.

Okay, some of what I’m going to say is a rehash of what others have said, and some of it’s going to apply to all car makers, not just Ford and GM, but I’ll try to tailor it to just those two makers.

First, GM. The first thing that GM needs to do is shut down the executive cafeteria and force them to eat with the rank and file. That will (after much weeping and wailing and gnashing of teeth) improve management/employee relations which positively suck at GM. The next thing GM needs to do is require every member of management, every engineer, every designer, everyone who has sway over the design and production of the cars, to spend at least one month out of the year, working on the assembly lines, and another month out of the year, working at a dealership (and never let 'em work the same line or dealership twice). That will solve any number of problems. Not only will those suits know the cars, but they’ll also know the customers, which is vitally important for giving GM the turnaround it needs so badly.

Next, GM needs to reduce it’s parts inventory. For decades now, Ford and Chrysler (as well as the Japanese car makers) have been using the same engines across all their divisions, GM, on the otherhand, has tended not to do that. Which is just stupid, especially given the computerized nature of automotive engines these days. A simple chip swap can dramatically change the performance of an engine, without major redesign and retooling. GM needs to adopt this strategy. Additionally, they need stop using so many uniquely designed components for the mechanicals that the customer never sees! A Caddy owner isn’t going know, muchless care that the door handle mechanism on his $50,000 car is the same as that used on a $20,000 Chevy. They also need to design their cars so that one socket can be used to dismantle the car. There’s no reason why a car should have a 9MM bolt on one part of the engine and then a 15MM bolt on another part. Make 'em all the same Og damned size and you’ll see massive savings. You’ll have fewer tools to keep track of and buy, and you’ll only have to keep one size bolt and nut in stock. Use a smaller size screw for the trim and interior (but only one size) as well.

Finally, bring back the brand ideas of the past. At one point in time, the highest priced Chevy was just slightly below the lowest price Pontiac. Since the late 70s at the earliest, this hasn’t been the case, and the various brands have been cannabalizing sales from one another. For Chevy, they need to trim some of the models they make. Right now, they have 24 different models wearing the Chevy badge, that’s too many. Trim it down to at least half that, and aim them directly at blue collar America.

Saturn is already somewhat aimed at the fresh college graduate in search of their first new car and GM needs to sharpen that focus on that group. As those customers climb in the business world, you can aim them at either Saab (if they want an imported car) or Buick, if they want an American car.

Pontiac should be focused as an American version of BMW, at prices slightly higher than a Chevy. If you want a fast car, you buy a Pontiac.

Buick would be for the middle management types, while Cadillac should be for those guys who are on top of the heap and want to show that they’ve got a lot of money to blow on an expensive car. For some odd reason, GM still has Oldsmobile on their site, even though they’ve killed the brand. It could, however, be brought back, and positioned as a mid-line brand between Buick and Cadillac, which sells fast cars (at BMW prices).

GMC, should be trucks. Allow every brand to have one SUV, but in general, if you want a GM built truck, you have to go to GMC. As for Hummer, well, GM hasn’t fouled it up too badly, yet, but they’re working on it. Not only have they given us the Og’s ass ugly H2, but they’re looking at introducing a lower priced “starter” model. All of this is dead wrong. Hummer needs to simply have the image of “If you need a badass truck that can do anything, go anywhere, and withstand anything, then you need a Hummer.”

As for Ford, the first thing they need to do (besides some of the generic things I mentioned above), is to figure out what the hell Mercury is. It doesn’t really have much identity as a brand, since it sells mainly rebadged Fords and Lincolns. It needs it’s own identity, like say, fast cars, or family cars, whatever, it needs it. Then Ford needs to cut out the unique crap they do with their cars. I’m not talking about designs, but every now and then, Ford gets some goofball idea that they latch on to, which everyone hates. One example being the years where they put the horn on the turnsignal stick. I don’t know of a single person who liked that. That was a bad idea from the get-go and never should have been implemented to begin with and Ford has a bad habit of doing things like that. IMHO, any design engineer who comes up with something so stupid needs to be shot, and their corpse hung up in front of automotive design schools as an abject lesson.

This is so weird concidering that during the 70’s thru the 80’s chevy actually was the perfered speed platform , a Camaro Z-28 was actually lighter than the coresponding Trans-am. However during my daily commute to work , your comment is so right on the money , all the speeders are driving pontiac products , including yours truly.

How many civillian units are they forecasting they can sell ?

Declan

Heh, my Mum’s old Renault Clio had one of those. I remember it made it easier to flash your lights and sound the horn with one simple move, push the stick in and pull it towards you. That suited my Mum’s style of driving a lot more :wink:

That, I don’t know, but ALL SUVs and large vehicles are cash cows for car makers, so no doubt they want to crank out all they can.