May 13th, 2005
This is going to sound bad. But it's unfortunately true. Our favorite car company, GM, has caught more than a cold this time. We've known they've been hurting for a long time. You don't go from 42% market share in the early 80s to 25% in 2005 without having your fans crying in their beer.
- GM loses $1.1 billion in first quarter of this year due to slowing of big SUV sales. Does this remind you of the 70s all over again? OUCH!
- GM introduces 29 new vehicles in 2004. Sales year to date are down 5%. OOPS & OUCH!
- GM agrees to pay Fiat $2 Billion to get out of a bad “put” option deal. BIG OUCH!!
- GM cancels the Zeta rear wheel drive platform plan due to the cost of developing it. (Thank you Fiat.) The 2007 GTO was to be on this platform but will be moved to a stretched version of the Sigma platform that Cadillac is using. HMM
- Bob Lutz tells some analysts that if Pontiac and Buick sales don't improve they may go the way of Oldsmobile. OOPS!
- The next day Lutz is demoted to VP of World Product Development, no longer having full control of North American operations. Was this a case of “Loose Lips Sink Ships”? OUCH!
- GM states that health care benefits cost them $1400 per car. OUCH!
- GM bonds are down graded to junk bond status. GM owes $291.8 billion in long- term debt. How's that for a Visa bill! OUCH!
- The sharks (Scavengers) are starting to circle. Kirk Kerkorian decides to buy up to 8% of GM stock at $31 a share because he thinks it is undervalued. It was in the $40s just a few months ago. He is likely going to force them to cut major amounts of fat (which could mean divisions, some are speculating a GMAC spinoff.) so he can drive the stock price up then cash it out getting major profits. The company may not be the same after he has gone through some of his leveraging. FUTURE OUCH!
- GM continues to lose market share now down to 25.7% and dropping from 27% just last year. OUCH!
- The new G6 (Generic 6) and Buick LaCrosse that Bob Lutz played a big part in styling are not selling with a 120-day supply in the pipeline. Bob was going to be the guy that turned uninspiring bland styling and product offerings around when he was brought in. We all hoped he could make some fun things happen at GM. Let's hope the Solstice can be one of them. He did it at Chrysler before they became a Mercedes subsidiary. Has Bob Lutz been bitten by the Generic Motors syndrome too where all good car guys are punished for innovative thoughts? Fuel for the Soul?. OOPS
- Speaking of the Solstice. The latest seems to be that it will not make it to dealers now until September or October or ??? due to production problems. Just in time for the end of the roadster/convertible season. Oh well a Solstice convertible for Christmas sounds good. It was supposed to be out by June. OOPS!
- The car magazine writers such as Brock Yates in Car and Driver says, GM needs to scrap their 50s vintage motors and stage a ruthless design, engineering and styling department coup d'etat. He could be right. COULD BE A BIG OUCH!
- GM pulled out of the electric vehicle business last year and is taking all the cars back to the crusher in Mesa . Many of those that had them are not happy to give them up. Meanwhile in the hottest category the hybrid segment GM is way behind Toyota in offering models for sale. Rumors have it that GM may end up working with Toyota to do a hybrid. OOPS!
Well, enough of this trashing of my favorite car company. We all want GM to do well. We just wish they would take a more aggressive stance in making cars that “Build Excitement”. Here are a couple of more interesting things.
- The Solstice was featured on “The Apprentice with Donald Trump a few weeks ago. The apprentices were to design a sales brochure for the Solstice for Pontiac . The people on the show were in awe of the car. It was a great way to get the word out about this car. Unfortunately, it was too much to soon. The car needed to be in the showrooms when this was on. Pontiac did take orders for 1000 cars as a result of the show. Hope these people still want them when the snow starts flying.
- Pontiac is running a really cool 4-page ad in the car magazines right now. They are featuring the Pontiac racecar winner of the 24 Hours at Daytona. Then they show the new 400 hp GTO complete with recessed grill and hood scoops on a racetrack with the new Grand Prix GXP with V8 power. The GTO looks pretty sharp in it's new front-end trim.
- From Sean Mattingly of the Ultimate GTO web site; Last weekend I saw the new action movie called XXX: State Of The Union at the drive-in movies under the stars. Not bad for a drive fast and blow-em-up movie. I'll give it three stars. Ignore the negative reviews of people that can't appreciate the GTO content. They review it and say "implausible, ridiculous, cardboard sequel, absurd". Hell, yes, it's absurd! It's a 1967 GTO crashing through a barn with no damage. The fantasy car shoots rockets from the headlights. All cars were cool in this movie. Ice Cube was a master at hand-to-hand combat, knocking out about 30 attackers through the flick in two seconds each. Fun preposterousness!...
Sounds like it could be a fun movie if you don't expect more than “pure escapism”.
Always hoping for more “ Pontiac ………………………………..Action”
Until next time…The "Real" Bill McCoy