Lutz Says "New" GM Will Be "Smaller, Leaner Powerhouse"

Edited from this article:

"After finishing his statements, Lutz leaped atop the podium and screamed, 'Ain't none of you panty-waists ever killed a bear with a Vette's crankshaft. I have. Twice! Suck on that greenies!!!!'

"He then launched himself at a nearby bearded journalist exclaiming, 'I'm gonna mulch this one up and feed him to my Volt.'

"Onlookers responded with a shrug, 'After his earlier comments about GM's future it was already clear he's nuts. Why would we be shocked that he's currently feeding a writer for the San Francisco Chronicle into a Silverado's gas tank? Isn't that sorta expected from this guy?'"

"The U.S. government wants its money back, and our plan is to pay it back as quickly as possible."

Pay what back? According to the SEC filing yesterday, GM isn't going to pay back any of the $19.4 billion of "loans" that the Treasury has already given it.

^Unless they can later buy back their own stock which is being given/taken by the government in lieu of cash...

"and still sell enough cars to compete for top automaker in the world."

I wish this mentaility would just DIE. Sure, substantial market share is great (depending on how you get there) but being #1 in sales doesnt mean you execute or produce the best overall products. GM and Ford have always had that "bigger is better" mentality and it came back to haunt them in ways validated by their current circumstances. Toyota seems to be following a similar route as well as sheer focus on market dominance substantially damaged their legendary reliability and quality expectations. NEVER SACRIFICE QUALITY FOR VOLUME!

GM shouldnt focus on sales alone as product execution, high/consistent quality, reliabilty, customer service ETC ETC will naturally drive sales. Staying lean, efficient and getting the most from every dollar means that they will stay healthier when the market isnt.

As far as Lutz is concerned, I really like and admire this guy as he's a "car guy", has a clear understanding of what GM needs to stand for, and has helped the company produce some of their best products to date. I wish he'd stay!

Just let it die already.

hondacura4

I agree volume at all costs is a bad idea but my point was there is still enough demand for GM products that they can rival the worlds best.

There is no reason to "Just let it die already." as greenpony suggests.

the "let it die" mentality is exactly what is needed. its what the free markets have called for. the great thing about the free market is that it works like a democracy, except instead of voting at a school, we vote at the checkout counter. the U.S. government didnt step in and try to keep the steam and electric car companies open, they let the market decide, and it decided on internal combustion. the government didnt try to save delorean, it let it die like it should have. it didnt say "whoa we need to keep the steam locomotives around, it let them die.

the government does need some interaction in the market, as a
true free market would be run by a few monopolies (one of Marx's greatest contributions to economics), but it does not need to decide what the markets should do, it should make sure that the markets continue to expand and contract at their own pace, and that their is a somewhat level playing field.

in the past the when a major problem arose (as we face now with energy, both for transportation and non-transportation and the car companies) their are many proposed solutions, and the market decides what meets the balance between cost and productivity. now, some politicians believe that the government should decide what the solution should be (ethanol, GM, wind/solar power).

hopefully everybody on here understands the dangers of ethanol, and the stress put on the economy, and the wind/solar solution will not come anywhere near solving our energy problems.

with GM, the best thing the government could have done, was stay away, and let GM issue near junk bonds and see who invested. the government should have let GM either slowly die, or slowly save itself. right now, GM is addicted to life support (government loans) and is not looking to other less desirable options (for the company). if the government had stayed away from GM, and not gotten involved, GM could have had a better chance of surviving by someone taking a major risk, with major rewards. instead, the government is stuck with GM, and investors dont want to be involved, because as we have seen, the government wants unreasonable terms, and will in force those terms. the bond holders are being forced out and they are the ones that have the most invested. the government might lose $100B by the end of GM, but Obama doesnt care, there are bigger problems that the government wastes more money on (medicare/medicaid, social security, etc.) if the bond holders got involved and put people on the board that they wanted, they would have a better chance of getting something done. when people have their own money involved, they care much more.

what the government can do now, is let GM try to restructure, and let it liquidate some assets, giving GM cash to insure warranties, and day to day operations, and cut cash to GM. the only time that the government should get involved again is when GM hits the absolute bottom and files for chapter 7. then the government would oversee GM liquidate EVERYTHING, and whatever GM cant insure in terms of warranties, and spare parts with its cash, would be covered by the government. this would keep costumers buying cars, as they would know that the car they bought would be covered and would have parts available.

Obama's idea of more government is better, and buy America is not American, its European. the American way is buy whatever makes since and let the consumer decided. that is what the government should do in this case, and actually be American, not telling its citizens what to buy, because in the end, everyone reading this can agree, you sure as hell dont want to drive a Yugo.

"because in the end, everyone reading this can agree, you sure as hell dont want to drive a Yugo. "

How about a Porsche? That's European too y'know.

Seriously...

"but Obama doesnt care, there are bigger problems that the government wastes more money on (medicare/medicaid, social security, etc.)"

How can spending money on helping people be wasteful?

Do you really care that little about others?

jackson611: +1

"How about a Porsche? That's European too y'know."

In case you didn't know, the Yugo was built in Soviet-bloc Yugoslavia during the Cold War.

"How can spending money on helping people be wasteful?

Do you really care that little about others?"

You're quoting him out of context.

firstwagon:

i didn't mean that medicare, medicaid, and social security were wasteful as a whole, just that there is a lot of waste in those systems because they are so big and inefficient.

by the way, with the government owning parts of GM, there will always be union baggage.

Why is there the mentality that no government aid must mean certain death? Everyone who is against government aid is calling for GM to "just die" whatever happened to the other wonderful market force called Ch. 11? The legitimate argument against government interference is being used as a facade for simple minded grudges against a company. Where was the argument against government interference when CAFE was created and arbitrarily increased? Where was the argument against government interference when franchise laws prevented the closure of under-performing brands and dealerships that damaged the image of the manufacturer? Where was the argument against government interference against the U.S. government subsidizing foreign brands? I've never once heard msdaisy, jackson611, blueguydotcom, and their kind ever complain about government interference that favored the foreign brands. They only complain when the government props up the domestic industry after working against it for years. This hypocrisy is really tiring.

I also couldn't agree more with HA4. Pursuing quantity at all costs cost GM in the first place, and it is costing Toyota dearly now. I feel GM needs to ditch that mentality, and changing the name from General Motors to something more specific (Chevrolet Motors?) would be a good symbolic step. He should know, as Honda is successful because their automotive division focused on what it does well, and consistently delivers on that. Chevrolet and Cadillac have strong lineups. Buick has a good vehicle in the Envoy and what will probably be a fine vehicle in upcoming LaCrosse, but those vehicles should go to the two strong brands. The modern American market has certainly favored automotive companies with two brands - a mainstream brand and a luxury brand. Hopefully a Ch. 11 process will allow GM to shed everything that isn't attached to Cadillac and Chevy, regroup, and expand using two very strong, focused brands.

@stovt001: first off, ch. 11, or any other bankruptcy, is not a market force, its a legal standing, other wise known as government interference, except it is needed as it prevents market forces from taking over.

while i did not specifically state the term ch. 11, that was implied when i said "let GM try to restructure, and let it liquidate some assets, giving GM cash to insure warranties, and day to day operations, and cut cash to GM." that is what any company in ch. 11 does, usually. i listed ch. 7 because i would assume that is where GM would be headed without government loans (i can't be positive however, because i do not want to take the time to look through their annual report).

i have nothing against GM. i own a GM car. that being said, its not my favorite car, and no company is bigger than the market. if GM failed, it would be a kick in the pants for the economy, but it would be better than the government trying to run a company. the only thing the government is efficient at is being inefficient. if you thought GM was in trouble now, imagine if the government ran it. we cant even get the people who set the taxes to pay them right, so how do we expect the government to be able to run a multi-billion dollar company? (the federal reserve doesn't count, it is run by business people and not politicians, and their it is very difficult for politicians to disrupt what the fed does).

i have always been against government intervention in the market in most places, but when i saw firstwagon's response that said "There is no reason to 'Just let it die already'" it really set me off. there is a reason why the US has a stronger economy than any other nation (wait until China's stimulated growth ends) , because the government has limited involvement. the reason why GM is in this spot is because of government involvement as you listed.

the reason why i have never complained about government involvement of other nations is that i cant control what other governments do. if Japan wants to invest in its companies and give us better cars than what we can do, so be it, everyone wins, except for the undereducated GM workers getting paid more for manual labor than they should, just because they collude and form a union. imagine if ever auto-seller in the US got together and told us that next year every car would cost 25% more, and we as Americans had to pay it? the government would be all over the companies and file anti-trust suits within days. however it individuals within a company decide to collude and from a union, the government decides that it's alright and then passes laws to help them.

there is no hypocrisy here. i have always felt this way, but it is not reasonable to expect me and everybody else that you listed to comment on EVERY car story and bitch about government involvement. hypocrisy is not like lying, you can't do it through omission, at least not in this case.

Two things
1) I wasn't just referring to other governments supporting their manufacturers. Our governments in the US have also subsidized foreign companies, and not with temporary loans either. No, those subsidies are permanent and will not be paid off.

2) It is a concern for free-market supporters if foreign governments subsidizing their companies. Allowing for such interference in a free-trade economy means our home industry is destroyed. We make nothing and import everything because we can't compete due to foreign cheating. Tell me how long you think that is sustainable. I understand your philosophy and generally agree with it, but supporting government support of foreign manufacturers, whether that support comes from our government or theirs, is hypocritical. If the government stops supporting GM, they also must stop supporting Honda, Toyota, BMW, etc. and they also must call out Japan on their violation of free trade principles.

The writing is on the wall. The new GM will not last that long. Private investment or credit is gone when they realize that you don't have any guarantee of getting paid when the government and union is running the house with tax payer money.

Do you want your money owe being bulldoze away by the GOV court? I don't think there are a lot of fools betting on getting some investment back in the new GM. Even If I'm Warren Buffet, I won't touch that with a 12 foot pole.

Man, you guys have no sense of humor. :(