2005-12-08

GM Fantasylane Blog


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Allllriiiight! I've had about enough of GM's Fastlane Blog (which will, from here on out, be referred to as GM Fantasylane), the parallel bizarro world where up is down and fast is slow.

Recently at FantasyLane: Lutz defends GM's further investment in SUV (i.e. fuel inefficient) line, GM Marketing hypes the red tag sale, and GM Marketing tackles backlash against Red Tag post. It seems the Fantasylane readers just want to hear about the cool cars, which is the fantasy setup for the GM blog, if only they could figure out how to translate their readership into car sales.

In the real world you have issues like poor financial performance, layoffs, rising health care costs, etc. In the real world people ask these questions: "How many people are you going to lay off next quarter?" "If your vehicles are so good, how come you have to keep marking them down?" "How do you expect to generate the cash necessary to rise above your crippling benefits costs by continuing to manufacture vehicles that will only sell at a deep discount (i.e. that don't generate much profit)?"

I get that it has been difficult for the US auto-makers. The history of their industry allowed them to settle into an inefficient way of doing business. But the problems have been abundantly obvious for decades now and there has been little change: Blame anything but your own decision-making and continue to produce what you want to produce rather than what the customer wants to buy. Why the emphasis on SUV's? They are high profit margin ... except when sitting on the showroom floor. When faced with the one-two punch of a high car payment and $50 per visit to the pump, customers aren't buying enough to help anything.

Unions have you hamstrung ... and? It is what it is. The companies and the unions marched merrily down this path together. They shared in taking the excess for granted, and now they share in the looming consequences. It doesn't matter, because once again, in the showroom and at the gas pump, no one cares about the unions, apple pie or any of the other defense mechanisms.

So, at the rate GM is bleeding, they've got 2 years worth of cash left in the bank. They can shut up and spend that time righting the ship, or they can slap a red tag on their problems and talk about how great their cars as they take the fast lane to Chapter 11.

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