GM's check engine light is flashing once again

[Flybrian]

GM's check engine light is flashing once again
June's slumping sales echo former board member's warning that automaker isn't in clear

Daniel Howes | Link to Original Article @ The Detroit News

Nine months ago Jerry York, billionaire Kirk Kerkorian's flamethrower-in-chief, quit General Motors Corp.'s board and expressed "grave reservations" about the staying power of its North American turnaround.

After the crappy June GM delivered -- sales plunged 21.3 percent for a year-to-date market share of 23 percent and an all-time low of 22.3 percent in June -- could ol' Jerry have been more on target than the General's management cares to admit, thanks to fewer incentives, $3-a-gallon gas and its impact on the sales of trucks and SUVs?

"I have grave reservations concerning the ability of the company's current business model to successfully compete in the marketplace with those of the Asian producers," York wrote in his resignation letter last October to George Fisher, GM's top outside director.

Officially, GM scoffed at York's "reservations." But since then, fuel prices have stayed stubbornly high. Democrats, now in control of Congress, are pressing hard to ratchet federal fuel economy rules sharply higher. A three-way deal between GM, the United Auto Workers and bankrupt Delphi Corp. has been ratified, raising hopes of a breakthrough UAW contract in September.

Yeah, but. Talk of yet another stalled GM turnaround (how many, I've lost count) is percolating because market share keeps sliding, cash continues to be burned and anyway you cut it, too few Americans are willing to buy the General's improved metal without being paid an incentive to do it.

Midway through the year, sales of GMC are up 4.9 percent and Saturn is up 21.4 percent compared with last year, according to Autodata Corp. But sales of Buick are down 27.9 percent, Cadillac is down 11.7. Chevrolet is down 7.2. Hummer is down 17.3. Pontiac is down 14. Saab is down 3.9.

That's hardly a rousing endorsement of GM's North American turnaround or its product offensive, however real it may be to critics or patrons of the new "Transformers" movie.

We've seen this real-life movie in Detroit before, and it always ends badly -- more cost-cutting, more plant actions, more tortured explanations. A favorite: The myriad reasons GM is taking hits on its high-margin pickups and SUVs even as the same forces seem to almost always steer clear of foreign rivals like Toyota.

Drive revenue -- or die

Tacticians looking to this summer's national contract talks might spy opportunity in these speed bumps, another chance to plead poverty with union negotiators. They may see a chance to create a fund to off-load GM's retiree health-care obligations and put them under union control.

Perhaps, but the gnawing reality of GM's predicament is that cutting costs, closing plants, killing jobs and extracting union concessions may help improve the business model, but they are no guarantee of success in the market.

Even fielding better products isn't enough to keep GM's "check engine" light off -- the most worrisome sign of all.

[FUTURE_OF_GM]

Here we go again...

One "off" month and the cynics are coming out of the woodwork with their "woe is me" stories about how the whole damn turnaround is a myth.

How many of the turnaround products have hit the road; The 900s and Lambda? Sure, we also have the Aura which should be doing better and the Sky/Solstice which was never high volume anyway. However a lot of the new product isn't even on the road yet (Malibu, G8, CTS, Astra, Vue is just rolling out, etc.)

I'm sure it's only a matter of time before we have NO domestic auto industry thanks to trendy, self loathing americans and worthless money fueled politicians. But at least these "experts" could let us have our last moments in peace.

Edited July 9, 2007 by FUTURE_OF_GM

[CARBIZ]

[hyperv6]

Is GM in the clear no!

Is GM in trouble No!

Just more alarmist reporters looking for something to write about.

If you factor in the new roll outs along with the less incentives and reduction of fleet sales this is to be expected.

Look for GM to start a new roll soon around Sept.

If all the new GMC Lamdas I saw out last weekend are any indications we should see some gowing numbers soon.

It is about profit not total sales anymore!!! Who cares if you sold the most cars if you don't make money on them.

[CARBIZ]

Too many reporters chasing too few stories. What really needs to happen is a few hundred irrelevant newspapers and media outlets to close shop so that the remaining can start reporting meaningful stories.

[regfootball]

the media is hurting for jobs. today's lifestyle section front page in the paper here was an article copied from NYT about how the television female chefs are wearing plunging necklines.

I kid you not. this after the star and sickle laid off like 140 reporters. and this is what they fill front pages with.

i wonder if someday the media will take a hint that expert status doesn't get granted to you just because your spew ends up on newsprint. People exchange their own thoughts on the net, and really don't want to be bothered with self important, mindless, unqualified journalists anymore.

Refreshing, if that comes out of this print houses losing big bucks.

[Camino LS6]

Too many reporters chasing too few stories. What really needs to happen is a few hundred irrelevant newspapers and media outlets to close shop so that the remaining can start reporting meaningful stories.

[chevelle454]

I can't stand Howes. I can't believe this guy works for a Detroit paper

[haypops]

Turn around is fair play. Perhaps GM should go into the publiching business and write articles about the media loosing their jobs.

[CARBIZ]

the media is hurting for jobs. today's lifestyle section front page in the paper here was an article copied from NYT about how the television female chefs are wearing plunging necklines.

I kid you not. this after the star and sickle laid off like 140 reporters. and this is what they fill front pages with.

i wonder if someday the media will take a hint that expert status doesn't get granted to you just because your spew ends up on newsprint. People exchange their own thoughts on the net, and really don't want to be bothered with self important, mindless, unqualified journalists anymore.

Refreshing, if that comes out of this print houses losing big bucks.

It's not just restricted to the print media. I despair at watching TV these days. Instead of having 12 channels of decent programming (like in the '70s), I now have 200 channels of CRAP. Thank God for the remote. If I had to get up to change the channel in the futile search for something decent to watch, I would like like a triathalon athlete!

News stories are becoming sillier, and more pathetic. Ditto for business news.

A slow copy day? Go to the boss with another bad news story to write about GM. Guaranteed to get approved, easy to research and I can go back to touching up my resume or doing my nails.