Chicken Little's Second GM Bankruptcy: The Gold Medal For Silly Op-Ed Pieces

Forbes ^ | 09/21/2012 | Bob Lutz

[SeekAndFind]

Forbes contributor Louis Woodhill must deserve some sort of special recognition for his thinly-argued op-ed contribution forecasting an early second demise of GM.

As rationale, Mr. Woodhill cites a list of alleged GM ills, from the 2013 Malibu (last reported to be off to a very fast start and winning wide praise from the professional media) to declining market share in the US market.

The fact that he would focus on GM’s admittedly-lower US market share as a harbinger of impending doom demonstrates the most profound lack of understanding of the vehicle business. Product strength is only one component in the market share equation. Other elements affecting share are transaction prices, marketing spend, and propensity to make share-enhancing, low-profit sales to daily rental fleets.

[SeekAndFind]

Lutz ( He calls himself a car guy and that's what he writes about ), names the following reasons why GM is still viable:

* GM enjoys high transaction prices, among the highest in each vehicle class.

* Sales to daily-rental companies are rationed, and increasingly left to Asian competitors who formerly eschewed them. In short, the strategy is to make money, rather than buy market share: GM is now doing exactly what critics, for decades, said it should be doing: making money in the car business.

* The compact Chevrolet “Cruze”, at last check, was selling roughly one million units globally and in the running for the world’s best selling compact title.

* The small Chevrolet “Sonic” leads its segment, and the new Cadillac ATS has been widely praised as being at least on a par with the best of the German offerings.

* GM’s strength is in its global reach, demonstrated foremost by its huge, and profitable, success in China, a market that is in the process of dwarfing the US in size.

* GM is very well positioned in Latin America and the former Eastern Block.

* GM is profitable and enjoys a positive cash flow. Its products are very well accepted around the globe.

* No other company can match the performance of the Corvette ZR-1 at anywhere near the price.

* No other company can challenge GM’s dominance in full-size SUVs, nor does any other maker offer the advanced hybrid system that makes these large vehicles economically and environmentally acceptable.

* No other car company has yet demonstrated the ability to duplicate the Chevrolet “Volt”, arguably the most technologically-advanced car on the planet.

[M Kehoe]

* No other car company has yet demonstrated the ability to duplicate the Chevrolet “Volt”, arguably the most technologically-advanced car on the planet.

That must be the reason GM discontinued production.

5.56mm

[Spktyr]

What he forgets to mention is that they are practically having to give away the Volt, that many GM cars are being leased or sold at sweetheart deals to people with horrific credit ratings (such as 0 down 0 percent interest to people with sub-500 credit ratings), and that their ‘making money’ is only if you ignore the huge amount of money they still haven’t paid us (and other creditors) back.

[jjotto]

Swiss-born Bob Lutz is an auto exec and contributor to the demise of GM.

“Product strength is only one component in the market share equation,” says Lutz. Idiot Lutz skips over the fact that it’s the only component that counts in the long run.

[I cannot think of a name]

He seems to have left out one rather significant factor:

People like me, who even in this economy have the money to buy new cars, and who have been lifelong GM people, now drive two Fords, and will never purchase another GM product, even if they build one that can whistle Yankee Doodle out of the tailpipe.

Bet we count for something.

[taildragger]

He's right about the Vette and that is about it...

The rumored next gen F-150 must have them crappin their pants, their design cycle is such they can't retort it... Rut-Roh...

BTW, their new Malibu missed the mark in rear leg room and I hear got brutalized by Car and Driver...

"No other car company has yet demonstrated the ability to duplicate the Chevrolet “Volt”, arguably the most technologically-advanced car on the planet."

Rut-Roh Maximum Bob,

It is called the Fusion Energi and will make the Volt look like moldy cold cuts that have been sitting on the counter to long without refrigeration...

[Covenantor]

Lutz ( He calls himself a car guy and that's what he writes about )

LOL! Calls himself a car guy. You've never heard of Bob Lutz before have you? Yeah, he IS a "car guy". Do a wiki search on Bob Lutz to see just how much of a car guy he was and is.

you funny guy ;>)

[Riflema]

You have to feel some sympathy for Bob Lutz, he was a Marine aviator, 40+ year car industry exec and actually a pretty straight-talking guy (I suspect he was a major factor in GM becoming a Rush sponsor, pre-BK). Then GM got obama’d and he’s stuck with the “pig’s ear/silk purse” problem.

[SeekAndFind]

Hey, I’m just quoting him.

This is what he says on top of the article:

Bob Lutz, Contributor
I’m a car guy, and that’s (mostly) what I write about.

[GBA]

There are three or four GM vehicles I would buy and probably be happy with, but there is no way that's going to happen. I won't reward them with my business.

But, I would have if they had gone through the legal process, through bankruptcy and reorganization into a better company rather than what actually happened.

I would have been happy to support them in their restoration had they done it the legal way and would have encouraged others to do the same.

Instead, I bought a Toyota to replace my Toyota and am looking at a Nissan, a Ford or another Honda to replace my Honda.

I don't even read the reviews for GM cars in all the mags any more. Way to go, obama and the UAW! I didn't think you could chase me away from a Chevrolet, but I was wrong. And now you can't get me back.

[GBA]

Ford has done a nice job with their newest models. The new Fusions and Escapes have me very interested.

[Bigjimslade]

GM’s success is driven by Government fleet purchases. They claim the increases are from localities but Obama has given federal grants to localities to buy GM cars. Up 79% in June then 115% in July. Do we need to know anything else. The sad part is this likely hurts Ford and they did nothing to deserve it.

http://nlpc.org/stories/2012/08/02/what%E2%80%99s-behind-115-rise-gm-government-fleet-sales

[Ouderkirk]

People like me, who even in this economy have the money to buy new cars, and who have been lifelong GM people, now drive twoToyota's, and will never purchase another UAW built product, even if they build one that can whistle Yankee Doodle out of the tailpipe.

There....Fixed it.

[Celtic Conservative]

Does Aston Martin know Ford has been using its signature grille design on its econoboxes?

CC

[taildragger]

They used to own them before they sold them, so I am sure they do :-)....

[PAR35]

Good parody. I wasn’t sure it was humor until I got to the punch line:

“No other car company has yet demonstrated the ability to duplicate the Chevrolet “Volt””

[Osage Orange]

I might buy a GM car....but it will be a 1971 Chevrolet Chevelle SS 454..or a Chevelle SS 396, 1966..or maybe a '46 Chevy truck.

But I will NEVER buy a new GM vehicle.

[Celtic Conservative]

I currently own as '55 chevy 210, that's about as recent as I care to go these days.

CC

[SeekAndFind]

RE: “No other car company has yet demonstrated the ability to duplicate the Chevrolet “Volt””

You know he was serious right?

[PAR35]

Unwillingness to repeat someone else’s failure doesn’t indicate an inability. So it has to be a slick joke.

I drove a fair number of GM cars 2008-2009. Some of the last Pontiacs were fun - I wouldn’t have minded owning a 5 or a 6. The Impala was a poorly designed piece of junk that you couldn’t give me.

Told me a lot when they killed the Pontiacs and kept the Impala. I’ll stick to my Toyota, Sonata and really old Chrysler until something better comes along.