GM selling majority stake of commercial

[andy82471]

http://news.yahoo.com/s/ap/20060323/ap_on_bi_ge/gm_gmac

DETROIT - General Motors Corp. said Thursday that it is selling a majority interest in its commercial mortgage division for $1.5 billion in cash to a private investment group.

In addition to the cash payment for a 78 percent stake in the business, GM said that GMAC Commercial Holding Corp. has also repaid $7.3 billion in intercompany loans as part of the deal. That would boost the total proceeds from the deal to almost $9 billion.

The announcement comes a day after the world's biggest automaker and its major supplier, Delphi Corp., said they plan to offer buyouts to more than 125,000 hourly workers under an agreement with the United Auto Workers. Workers are expected to start leaving GM by June 1.

GM is under enormous pressure to reverse its fortunes. It recently had to increase by $2 billion its reported 2005 loss to $10.6 billion. It has been losing U.S. market share to Asian automakers who are building cars that are among the most popular with American consumers.

GM shares rose 23 cents, or just over 1 percent, to $22.24 in early trading on the New York Stock Exchange.

The buyer group includes Kohlberg Kravis Roberts & Co., Five Mile Capital Partners and Goldman Sachs Capital Partners.

GM said the deal for the commercial mortgage unit stake is separate from GM's announced plans to sell a controlling interest in the its overall finance business, General Motors Acceptance Corp.

"This sale is good news for GMAC and provides GMAC with even greater liquidity," GMAC spokeswoman Joanne Krell said.

GMAC Commercial Holding also announced that it has changed its name to Capmark Financial Group Inc. The name change will be fully implemented in the second quarter of this year. Capmark "will launch with an investment-grade rating," Krell said.

GMAC said in August that it had agreed to sell a 60 percent stake in its commercial mortgage holding business to Kohlberg Kravis Roberts and the other partners, but no financial details were released at that time. The mortgage unit has a loan servicing portfolio of around $250 billion.

[Dragon]

Sounds great for the short term. I can see this hurting them in the long run though since they were a money maker

[Guest buickman]

Now, with Stanly O'Neal of Merrill Lynch gone (with the Fiat funds of course), we sell part of GMAC to Goldman Sachs where John Bryan, long time member of the General Motors' Board also serves a director (as he does on British Petroleum, MPG anyone?). Well, at least Mr O'Neal's brother Rodney still reigns at Delphi. Time to WAKE UP and CLEAN HOUSE! Is there any wonder why this Board continues to back "Red Ink Rick"?

Buickman

[evok]

Where's Hogan?

[tama z71]

News like this needs to get to the homepage ticker instantly.

[FUTURE_OF_GM]

Well, the street and the analysts are FINALLY getting what they want.

Striping GM of it's assets to make a buck. They'll continue to do this until GMAC is sold too. Then they push GM on off the plank to rot at the bottom like the Titanic and Enron.

[Newbiewar]

this might be a good thing... york wouldnt have done it unless 1.) Kirk benifited, and 2.) it was a financially good decision.

what this allows gm to do, is get a better day to day intrest rate on their operating costs, cutting the cost further of production...

its not a bad thing or it wouldnt have been done... there was a reason GM had a bad credit rating... and now it should be fixed

[usa1]

GM is running out of assets to sell to raise money to cover its losses and committments. I hope GM can turn things around in a hurry. There's precious little buffer left.

Mark

[Guest buickman]

How can anyone see the dismantling of GM as a good thing? Time to WAKE UP! I issued the warning bell a year ago, now it's become fashionable to call for the head of "Red Ink Rick".

Buickman

[rivieraranch]

They had no business in the mortgage business in the first place; it takes their attention away from cars. They need this money to fund that deal with the Unions to buy out all those workers.

[Newbiewar]

and one thing i noticed... is they are just selling the real estate portion... not the automotive sector... so they still have power to give 0% or what not...

[CaddyXLR-V]

How can anyone see the dismantling of GM as a good thing? Time to WAKE UP! I issued the warning bell a year ago, now it's become fashionable to call for the head of "Red Ink Rick".

Buickman

Mortgages? Dismantling GM because they sold the mortgage division? Your just grasping as whatever you can to badmouth "Red Ink Rick" aren't you? What the hell does mortgages have to do with building great cars? GM= General Motors, there is no motors in mortgages. GM just raised cash for the employee buyouts, and returned the mortgage division back to investment grade. Yet you find a way to spin it as a bad thing. You say you want to see GM succeed, and that is your whole purpose, but to me it looks like you would rather take GM down just to bring your enemy Rick down. Your just mad because Rick shot you down, now you have to come whine to everyone here 10 times a day about him. Get a life. Go sell some cars or something.

[I hope GMRULES again]

Mortgages? Dismantling GM because they sold the mortgage division? Your just grasping as whatever you can to badmouth  "Red Ink Rick" aren't you? What the hell does mortgages have to do with building great cars? GM= General Motors, there is no motors in mortgages. GM just raised cash for the employee buyouts, and returned the mortgage division back to investment grade. Yet you find a way to spin it as a bad thing.  You say you want to see GM succeed, and that is your whole purpose, but to me it looks like you would rather take GM down just to bring your enemy Rick down. Your just mad because Rick shot you down, now you have to come whine to everyone here 10 times a day about him. Get a life. Go sell some cars or something.

Sorry Buickman, but I'd have to agree with CaddyXLR-V on this one. Rick in last few months has negotiated a new healthcare deal with the UAW, cut exec pay, cut the divident, cut white collar jobs, capped pensions, raised cash by getting out of the Fuji and Suzuki alliance, came up with a competitive buyout package for Delphi/UAW workers, and raised much needed cash by selling off the Mortgage business. I still think he could get the boot in the near future but the guy's back is against the wall. Edited March 24, 2006 by I hope GMRULES again

[4gm]

Looks like "Bullsh*t Buickman" is at it again!

[buyacargetacheck]

Buickman is right. Wagoner is absolutely to blame (along with Smith, Stempel, and Smith - sounds like a law firm).

Sure, GM is and has been in a number of non-automotive businesses since forever, but GM is dismantling nevertheless to pay off obligations. Not a good place to be. About the only businesses left to sell off are remaining stakes in Suzuki and Isuzu, the NUMMI stake, GMAC Bank, GMAC Insurance, GMAC Residential Mortgage, and GMAC Automotive Dealer/Consumer. GM (and later Ford) should have stayed in crisis mode back in the 70s. But that would have required a change in culture.

Game just about over. Toyota's continuous improvement philosophy culture has won.

Edited March 24, 2006 by buyacargetacheck

[CaddyXLR-V]

Buickman is right.  Wagoner is absolutely to blame (along with Smith, Stempel, and Smith - sounds like a law firm).

Sure, GM is and has been in a number of non-automotive businesses since forever, but GM is dismantling nevertheless to pay off obligations.  Not a good place to be.  About the only businesses left to sell off are remaining stakes in Suzuki and Isuzu, the NUMMI stake, GMAC Bank, GMAC Insurance, GMAC Residential Mortgage, and GMAC Automotive Dealer/Consumer.  GM (and later Ford) should have stayed in crisis mode back in the 70s.  But that would have required a change in culture.

Game just about over.  Toyota's continuous improvement philosophy culture has won.

It is not his fault GM needs to sell them off. GM has been declining since Wagoner was in his 20s! All the cars that came out the past 5 years were done under someone elses watch. HHR, Tahoe, Solstice, and Lucerne, are all selling at list price or above. I bet the Aura will also. And the next CTS. Why does that have to be said 500 times for it sink in?

[Guest buickman]

Wagoner is a surgeon, he cut the fat (11,000 at corporate HQ on West Grand), but proceeded to hit organs like Olds and now has struck the nervous system (GMAC). He has no idea how to grow the business and will most certainly have us bankrupt in short order. Then you blind followers can try and explain how it's really a good thing and how wonderful this fool is. You can't handle the truth.

Buickman

Edited March 24, 2006 by buickman

[daves87rs]

Wagoner is a surgeon, he cut the fat (11,000 at corporate HQ on West Grand), but proceeded to hit organs like Olds and now has struck the nervous system (GMAC). He has no idea how to grow the business and will most certainly have us bankrupt in short order. Then you blind followers can try and explain how it's really a good thing and how wonderful this fool is. You can't handle the truth.

Buickman

Let me put this to you plain and simple: If GM can't make money selling cars, then they shouldn't even be in business.

It would be like trying to cut through your bull**it for facts.

There is nothing wrong with selling your money makers when things are rough.

It is not like GM couldn't dip into the next big thing ( like real estate )

I would be a lot less worried about growing the business, they need to worry about

saving it.

GM needs to get back to making cars again. Period.

I'm not blind. I just use common sense......

[daves87rs]

Well, the street and the analysts are FINALLY getting what they want.

Striping GM of it's assets to make a buck. They'll continue to do this until GMAC is sold too. Then they push GM on off the plank to rot at the bottom like the Titanic and Enron.

You have to have faith, my friend.

I don' think they will sell everything though....

[daves87rs]

Sorry Buickman, but I'd have to agree with CaddyXLR-V on this one. Rick in last few months has negotiated a new healthcare deal with the UAW, cut exec pay, cut the divident, cut white collar jobs, capped pensions, raised cash by getting out of the Fuji and Suzuki alliance, came up with a competitive buyout package for Delphi/UAW workers, and raised much needed cash by selling off the Mortgage business. I still think he could get the boot in the near future but the guy's back is against the wall.

Agreed.

[Newbiewar]

Sorry Buickman, but I'd have to agree with CaddyXLR-V on this one. Rick in last few months has negotiated a new healthcare deal with the UAW, cut exec pay, cut the divident, cut white collar jobs, capped pensions, raised cash by getting out of the Fuji and Suzuki alliance, came up with a competitive buyout package for Delphi/UAW workers, and raised much needed cash by selling off the Mortgage business. I still think he could get the boot in the near future but the guy's back is against the wall.

i think a lot of that has to do with york...

[buyacargetacheck]

I don' think they will sell everything though....

What do you mean? That is the plan. The only thing besides shares in NUMMI, Isuzu and Suzuki is GMAC. And there are plans to sell a majority stake in GMAC. This is GM's last chance.

[CaddyXLR-V]

Wagoner is a surgeon, he cut the fat (11,000 at corporate HQ on West Grand), but proceeded to hit organs like Olds and now has struck the nervous system (GMAC). He has no idea how to grow the business and will most certainly have us bankrupt in short order. Then you blind followers can try and explain how it's really a good thing and how wonderful this fool is. You can't handle the truth.

Buickman

You are blind because of your hatred for Wagoner. That is your drive, it is in every single post you have ever posted on here. You dont care about GM. You care about removing Wagoner. GM threw money at Olds in the late 90s, Olds got some of the best technology GM had at the time, with engines based off the northstar, the 2nd gen Aurora was a great car, but no one bought them. Olds was on life support when Wagoner became CEO. GM will not be losing money for the next 5 years, they just need the cash to make it through to when the contract will be negotiated, and some retirees start dying off. He is setting the stage for the future by buying out the workers, and cutting what is not needed, instead of trying to make a profit in the short term. Selling GMAC will get GM through the tough times, while returning it to investment grade, then things will start to get easier in the next few years. Your the only blind one here. It's not a coincidence that everyone of the insiders here dont agree with you either. Are you calling them blind too?

[Guest buickman]

Read the last 6 annual reports. Look at market share, losses, credit ratings, market cap, and the last Consumers Reports. The numbers and facts don't lie, spinmasters do. I don't hate Wagoner, I hate what he's done to GM.

Buickman

[I hope GMRULES again]

It was the clowns in charge in the 70's and 80's that refused to change or take the imports seriously that started GM's long slid, not Wagoner. If Wagoner is a surgeon than I guess when he took over in 2001 the patient was a walking time bomb with 4 blocked arteries and now somebody has to find a way to get them off life support.

Edited March 24, 2006 by I hope GMRULES again

[Guest buickman]

What has the man done to strengthen US brands and grow the business? Cadillac has had some success, Buick and Pontiac are starving for product and suffering a slow death. Olds is gone, GMC doing OK but Chevrolet is mired in a marketing cesspool. The corporate image is in the tank, dealers and suppliers are disillusioned if not broke. Credit ratings are well into junk, the debt is massive, emloyees and retirees are unstable and insecure. Yes Mr Wagoner has faced enormous obstacles and inhereited tremendous difficulties. However that is why he gets paid handsomely. It's his job to create and implement solutions and that is where he has failed miserably. Again I will state that when your pitcher is getting bombed in the fifth inning, you look to the bullpen. It's time for "Red Ink Rick" to hit the showers, if not be shipped to the minor leagues.

Buickman

Edited March 24, 2006 by buickman

[FAPTurbo]

Ok... so who should take Rick's place then smart guy? As mentioned before, it IS the clowns in the 70's and 80's that got GM to where it is today. I honestly think that given the situation, Rick is doing a decent job, and I doubt many of us would be able to do any better. Some of us probably have bigger dreams than Rick and a better vision, but with all the financial constraints and labour issues, we would not be able to realize them anyway and we'd be in the rut regardless.

Buickman, you gotta stop hammering Rick. I think most of us know what you are about and where you're coming from, but the Wagoner bashing is not really helping much in the discussion, and it seems to hijack threads...

GM should have never gotten into financing IMO. It never seems to fail; companies that grow too much and/or don't stay in their jurisdiction seem to do poorly (cough, Disney, cough).

Call me crazy and insane, but I am about to head over to a broker and buy some GM shares. I am that confident in the company, that I am willing to risk some of my hard earned cash from working graveyard in 40 hours a week.

It'll all turn out good, you'll see.

[evok]

Besides the BM's 20 Pts to Return to the Cess Pool, he refuses to add constructive and productive discussion on what GM management could do to restructure the business.

I forgot fire "Red Ink Rick."

He brings little if nothing to the discussion, besides the above. Hell he does not even understand this GMAC Commercial Holdings transaction based upon his latest tirade.

Maybe the BM should sell his stock in GM and take the tax loss. I am willing to bet he bought at 70. Instead of blaming himself for a bad investment he is blaming everyone else.

[daves87rs]

What do you mean?  That is the plan.  The only thing besides shares in NUMMI, Isuzu and Suzuki is GMAC.  And there are plans to sell a majority stake in GMAC.  This is GM's last chance.

Are the plans laid out in front of you? How the hell do you know??!

Even Gm doesn't know what they are going to do....until it is done.

You should know GM better than that.

[daves87rs]

Read the last 6 annual reports. Look at market share, losses, credit ratings, market cap, and the last Consumers Reports. The numbers and facts don't lie, spinmasters do. I don't hate Wagoner, I hate what he's done to GM.

Buickman

Well, look at the product, that should explain everything...

How about hitting the heart of the matter, Eh?

[daves87rs]

What has the man done to strengthen US brands and grow the business? Cadillac has had some success, Buick and Pontiac are starving for product and suffering a slow death. Olds is gone, GMC doing OK but Chevrolet is mired in a marketing cesspool. The corporate image is in the tank, dealers and suppliers are disillusioned if not broke. Credit ratings are well into junk, the debt is massive, emloyees and retirees are unstable and insecure. Yes Mr Wagoner has faced enormous obstacles and inhereited tremendous difficulties. However that is why he gets paid handsomely. It's his job to create and implement solutions and that is where he has failed miserably. Again I will state that when your pitcher is getting bombed in the fifth inning, you look to the bullpen. It's time for "Red Ink Rick" to hit the showers,  if not be shipped to the minor leagues.

Buickman

Unless you can find a better guy (or someone ballsy enough to try)

let me know.

Rick is not just the problem-it is GM as a whole.

Why not just Burn GM to ground? That would be a better idea....

Change is coming...don't worry your little head about that one.....

[daves87rs]

Besides the BM's 20 Pts to Return to the Cess Pool, he refuses to add constructive and productive discussion on what GM management could do to restructure the business.

I forgot fire "Red Ink Rick."

He brings little if nothing to the discussion, besides the above.  Hell he does not even understand this GMAC Commercial Holdings transaction based upon his latest tirade.

Maybe the BM should sell his stock in GM and take the tax loss.  I am willing to bet he bought at 70.  Instead of blaming himself for a bad investment he is blaming everyone else.

I think he needs to worry about the product his company....the one that sells cars first, don't you think?

A big part of GMAC is gone, oh well. We could cry about it, or just

I'm more concerned how they to fix the product, their bank account, and their K Mart image.....

[evok]

A big part of GMAC is gone, oh well.

That is what the BM will want everyone to believe.

[Guest flowmotion]

GM should have never gotten into financing IMO.

<{POST_SNAPBACK}>

GM has been in financing since the 20s -- it's been a key pillar to their success over the years.

It doesn't matter what you think about "Red Ink Rick" at this point. The deeds have been done. Like or not, it's the eighth inning for GM, and they're still behind by $10B. Either this new product comes through or it's all over.

Edited March 25, 2006 by flowmotion

[thegriffon]

This is a small and non-core part of GMAC - financing shopping malls etc. They still have residential mortgage (more closely tied with Auto loans), consumer and commercial finance (for car buyers and dealers inventory etc.). This business sold for $1.5 billion, plus the repayment of $7.3 billion in intracompany debt (money commercial mortgage had borrowed from GMAC) — $8.8 billion in cash to GMAC. Unless GMAC pays an extraordinary dividend, this money does not go to GM.

[ellives]

Game just about over.  Toyota's continuous improvement philosophy culture has won.

^This has got to be the most stupid statement in this thread. Do you actually think Toyota has a monopoly on continuous improvement? GM's automotive product is better than it has ever been (that's continuous improvement.) GM sold more automotive product last year than they ever have in the past (that's continuous improvement.)

The fact is the consumer has been totally brainwashed. It's the only way to explain why the traditional Buick buyer is now turning to Toyota Avalon. Why? It's certainly not quality. Buick beat out Toyota in last year's IQS. It's just not fashionable to buy domestic.

GM needs to find and hire a marketing team that knows what they are doing. Their message isn't getting across. You can sell dog &#036;h&#33; if you have good marketing. Land Rover is proof of that.

[buyacargetacheck]

Are the plans laid out in front of you? How the hell do you know??!

Even Gm doesn't know what they are going to do....until it is done.

You should know GM better than that.

What you don't read the news?

A majority stake in GMAC is on the block buddy:

http://biz.yahoo.com/ap/060315/gm_finance_arm.html?.v=6

This is in addition to the KKR commercial mortgage deal and the recent $20B in GMAC consumer loans sold to Scotia Capital (GM initially yields $3B). I hope they are successful and are able to use the cash to strengthen their NA Auto Ops position. However, if the past is indication (cash blown from EDS, Hughes, Delphi, Detroit Diesel, Electromotive sales among many others) I would not be a betting man.

I have been waiting for GM to "turn the corner" for 25 years. I would never have fathomed back then that GM would sink so low as to unload GMAC.

These are moves of desperation from a position of weakness. Take off your cheerleading skirt and develop a healthy sense of skepticism.

[buyacargetacheck]

^This has got to be the most stupid statement in this thread. Do you actually think Toyota has a monopoly on continuous improvement? GM's automotive product is better than it has ever been (that's continuous improvement.) GM sold more automotive product last year than they ever have in the past (that's continuous improvement.)

The fact is the consumer has been totally brainwashed. It's the only way to explain why the traditional Buick buyer is now turning to Toyota Avalon. Why? It's certainly not quality. Buick beat out Toyota in last year's IQS. It's just not fashionable to buy domestic.

GM needs to find and hire a marketing team that knows what they are doing. Their message isn't getting across. You can sell dog &#036;h&#33; if you have good marketing. Land Rover is proof of that.

Do yourself a favor and read The Machine That Changed the World by James Womack. He explains why the Toyota System is superior and why every auto company in the world has copied it to one degree or another (including GM). Unfortunately, according to people who should know, GM's internal executive culture is still stuck in another time. GM's product is good and has come a long way. That's not the problem. The problem is GM's inertia, something that Toyota's culture does not permit.

Edited March 25, 2006 by buyacargetacheck

[Guest buickman]

Unless you can find a better guy (or someone ballsy enough to try)

let me know.

Rick is not just the problem-it is GM as a whole.

Why not just Burn GM to ground? That would be a better idea....

Change is coming...don't worry your little head about that one.....

<{POST_SNAPBACK}>

GENERAL WATCH NEWS

Dear Buickman,

I always read the information you send with great interest. Thank you very much.

Recently I have pondered one question related to your suggestion that Rick Wagoner be replaced. My question is who should replace him?

What are your thoughts on a viable replacement candidate?

Thank you very much, and I await your feedback.

Dave

Hello Dave,

I would suggest the Board name Fritz Henderson (bluntly honest and frank) Chairman and appoint Joe Spielman (knowledgable leadership) as CEO. GM is far too large for any one man to function effectively as Chairman, CEO, and head of North American Operations. Alternatively, I like Tom LaSorda of Chrysler and Wolfgang Bernard of VW. In house, we also have proven leaders like Gary White (VLE for trucks) and James Hresko (newly named VP for Quality). Quite honestly, I am not real sure exactly who should be running General Motors, but I am POSITIVE who shouldn't be.

Buickman

[thegriffon]

As CFO Henderson (and his predecessor, the well-respected Devine) is even more responsible for the earnings restatement BM attacks Wagoner for.

As for the increased loss in revised preliminary 2005 results, GM is increasing the amount it is putting aside for the North American restructuring and Delphi bankruptcy as it gets a better idea of what it will cost. No-one is fiddling the books or making stupid errors. It was clear from the from the moment these figures were originally reported that they could easily go up, as GM was quite clear in stating. "You remember how we said it could be higher? Well it is." The actual cost in terms of cash flow will be spread out over several years (part of the increase is because the charge will now cover some restructuring costs beyond the 2007 contract negotiations).

Now for the cash flows, this has no bearing on profits since it is just a matter of classifying the cash flow as being from operations, or investments. For a finance company like ResCap it's a fine line. It's the same money coming in, on the same side of the balance sheet. No wonder it failed to concern the financial analysts.

Edited March 25, 2006 by thegriffon

[Guest buickman]

Amazing to see the justifications and explanations for losing BILLIONS upon BILLIONS. GM continues unabated in their financial free fall toward bankruptcy, while the dismemberment of the corporation further erodes any possibility of a Return to Greatness.

Buickman

Edited March 25, 2006 by buickman

[CaddyXLR-V]

Amazing to see the justifications and explanations for losing BILLIONS upon BILLIONS. GM continues unabated in their financial free fall toward bankruptcy, while the dismemberment of the corporation further erodes any possibility of a Return to Greatness.

Buickman

Yes, rational thoughts can be amazing at times can't they?

[haypops]

  Take off your cheerleading skirt and develop a healthy sense of skepticism.

I think you are refering to Kilts.

[ellives]

I just ordered it.

Do yourself a favor and read The Machine That Changed the World by James Womack.  He explains why the Toyota System is superior and why every auto company in the world has copied it to one degree or another (including GM).  Unfortunately, according to people who should know, GM's internal executive culture is still stuck in another time.  GM's product is good and has come a long way.  That's not the problem.  The problem is GM's inertia, something that Toyota's culture does not permit.

[daves87rs]

GENERAL WATCH NEWS

Dear Buickman,

I always read the information you send with great interest. Thank you very much.

Recently I have pondered one question related to your suggestion that Rick Wagoner be replaced. My question is who should replace him?

What are your thoughts on a viable replacement candidate?

Thank you very much, and I await your feedback.

Dave

Hello Dave,

I would suggest the Board name Fritz Henderson (bluntly honest and frank) Chairman and appoint Joe Spielman (knowledgable leadership) as CEO. GM is far too large for any one man to function effectively as Chairman, CEO, and head of North American Operations. Alternatively, I like Tom LaSorda of Chrysler and Wolfgang Bernard of VW. In house, we also have proven leaders like Gary White (VLE for trucks) and James Hresko (newly named VP for Quality). Quite honestly, I am not real sure exactly who should be running General Motors, but I am POSITIVE who shouldn't be.

Buickman

Ok, you have some people. Point taken.

The problem you are going to find is that there is no one who is going to want to replace Rick. Would you take a loaded gun if it was handed toyou?

I can understand why you think that- but we are still talking more than one issue here. It is not just a front office problem. It goes a little deeper than that...

[daves87rs]

What you don't read the news?

A majority stake in GMAC is on the block buddy:

http://biz.yahoo.com/ap/060315/gm_finance_arm.html?.v=6

This is in addition to the KKR commercial mortgage deal and the recent $20B in GMAC consumer loans sold to Scotia Capital (GM initially yields $3B). I hope they are successful and are able to use the cash to strengthen their NA Auto Ops position.  However, if the past is indication (cash blown from EDS, Hughes, Delphi, Detroit Diesel, Electromotive sales among many others) I would not be a betting man.

I have been waiting for GM to "turn the corner" for 25 years.  I would never have fathomed back then that GM would sink so low as to unload GMAC.

These are moves of desperation from a position of weakness.  Take off your cheerleading skirt and develop a healthy sense of skepticism.

Taking a point from FOG- I don't tend to believe everything I hear in the news.

The story changes just about daily...

Now, will they sell more? Maybe. But I wouldn't bet the farm on it either.

I find that funny that you call me a cheerleader. I guess you don't read my posts much then.

I have a healty dose of both.

It is simply time for some changes-whether they are good or bad.

[daves87rs]

I think you are refering to Kilts. 

[evok]

http://media.gm.com/servlet/GatewayServlet...=74&docid=17049

[ellives]

I have it. Read 2/3 of it so far. I'll finish it tonight. It's an interesting read, particularly because it's 15 years old and some of the statements in there (most?) were predictions that have clearly come to pass.

This said, YOUR comment was "Toyota's continuous improvement philosophy culture has won" and my point to you in my followup was that continuous improvement is not unique to Toyota. In fact this book is proof of my point. The "Toyota Production System" as mentioned in the book (and no for those wondering, the book isn't only about Toyota) is actually a "lean manufacturing" system and not a "continuous improvement" system at all.

I'm honestly not sure what a "continuous improvement philosophy culture" is. Grammatically it doesn't make sense.

Your statement underscores to me that you don't understand some key foundations of the discussion relative to GM's problems. Continuous improvement (kaizen) is in fact a philsophy of improving the process incrementally over time. I suspect it's safe to say every car manufacturer understands kaizen and in fact practices it.

GM will not be saved by any kaizen strategy and this book actually states this fact in many ways. GM needs a completely different approach, as the book points out, the old "mass production" methods have been supplanted as the dominant manufacturing approach by "lean manufacturing." This in effect means the Company needs a RADICAL change in its approach to manufacturing which will never be accomplished by continuous improvement programs alone.

Unfortunately, this kind of radical change would require top management changes. A bean counter like Wagoner isn't going to do it. They're historians. They explain what happened to the company in the last month/quarter/year. They are not visionaries. What else explains the body design and styling of the current Chevy Malibu?

Sometimes institutions as large as GM *do* coast from enertia for a long time. There are those who would argue they've been coasting for a long time.

Do yourself a favor and read The Machine That Changed the World by James Womack.  He explains why the Toyota System is superior and why every auto company in the world has copied it to one degree or another (including GM).  Unfortunately, according to people who should know, GM's internal executive culture is still stuck in another time.  GM's product is good and has come a long way.  That's not the problem.  The problem is GM's inertia, something that Toyota's culture does not permit.

[buyacargetacheck]

Yes, nearly every auto company now uses a form of the Toyota Production Method. However, not every auto company practices kaizen. Part of kaizen is thinking wholistically while eliminating waste. GM, especially at the very top, has a hard time with both. A FIAT debacle or allowing soap salesmen to torch your brands would never happen at Toyota because of the kaizen discipline. The fact that Womack's book (which was "old" news to industry people at the time) was published nearly 15 years ago yet GM's management is still running up down escalators says it all. The part of Toyota's philosophy that GM has adopted apparently is applicable in their minds only to the shop floor. That's really the problem. By the way, I like the new Impala and LaCrosse, but it's somewhat surreal that the pitiful failures of GM-10 are outlined in this 15 year old book.