Will GM's major product changes come soon enough to recapture a larger part of the market?. If not, what will be GM's future with a quickly diminishing market share?

Would more alliances with Asian manufacturers help to lower GM's production cost, specially for future, smaller, more efficient, lower cost PHEVs and BEVs?

Difficult years ahead for GM?

I am so screwed. My father and father in law, a combined 79 years of GM middle management experience just got their legs cut off. How can a company drop healthcare for its US salaried retirees after all these years of promises. The UAW would walk if it happened to hourly ranks. Other countries would not allow it thus only the US Salaried ranks take the hit.

Driving change at GM is like transforming the US military after the collapse of the USSR: it takes a looooong time and you need vast numbers of bureaucratic wheels that need to turn before you get the results you need. This is part of the reason they're getting crushed right now...

>> How can a company drop healthcare for its US salaried retirees after all these years of promises. << Not a good thing, collective bargaining prevents GM from doing this to hourly workers (or they'd do it to hourly in a heartbeat). But, rest assured Neil, if GM goes into Bankruptcy, they'll do it (and a whole lot more) to the hourly workers at that point (as this occurred in the Airlines). Anyone else notice how our national standard of living (except at executive levels, of course) seems to be gradually degrading? (you now pay for your own retirement, medical, manufacturing job is recycled into cheap "service" job etc..) It would seem like the chickens will roost for all this at some point.

Neil:

From the day I retired, I had to pay my own health care premium. I find nothing wrong with that.

Most retirement plans do not cover health care.

Does that do so, often drive the employer into bankrupcy or force them to close shop and move elsewhere.

More than half a century ago, then-General Motors President Charles Wilson was misquoted as having said, “What’s good for General Motors is good for the country.” That quote came to epitomize the auto giant’s arrogance. But it turned out to be oh so true.

GM was the backbone of Americas industrial might; it built the planes, trucks, and tanks that saved the world from the Nazis. It fed, clothed, housed, and educated millions in the Mid West through a constant and abundant cash flow that was as reliable as the sunrise.

Now, the giant automaker is seemingly spinning out of control; heading for the dust bin of America’s industrial history. The industrial heart of America is fallen low; the rust belt where only abandoned and decaying factories litter the land. The people evicted from their houses look for food in the food banks that are still open.

Some will say it is survival of the fittest where only the strong survive; its just the way the market works; but why does America have to be a jungle where only the most vicious and predatory capitalists dominate.

Arrogance, self-possession and this desire to dominate has plagued humanity unto it very beginning and has come home to roost on our America today.

A once strong and vigorous America has slowly been bled of its lifeblood by those who, in their vanity, care more for their place in history than the welfare of the nation. That desire for legacy has led to their infamy and eternal damnation in the hearts of our people. Blind loyalty to incompetence and furtherance of the interests of the few can have only one result: an enfeebled and destitute nation.

Were millions lose their homes; their life saving rent asunder in failed banks; the most stable and rich financial edifices collapse around our ears; take to heart the ultimate cause and make certain it cannot happen again.

GM management is finally getting serious.

The UAW has had to conform to the pattern of wages from the now dominant foreign non-union plants. Labor flexibility has had to come too.

The adaptation to a new market with a smaller number of trucks, will occur much more rapidly than in the 1970s. US designs were just too much different then to simply bring GM foreign designs home. Now they can and will even bring the tiny A cars, the Beat, here leaving no market unattacked.

Except perhaps, for the old compact pickups like the original Nissan and Mazda sub compact pickup trucks. Ford is preparing to bring the Transit here to claim that sub-Ranger market, though.

In the 1970s the first downsizing led to first generation vehicles with first generation, unrefined components, competing against mature foreign designs. This led to quality ans satisfaction issues with customers, and criticism from the auto press.

No longer. GM (and Ford's) foreign offerings that are and will fill US factories, are competitive, successful, refined, and mature in these foreign markets.

GM's conventional power trains for the small I4s, larger I4s, and HCV6 V6s, are as advanced and as refined as any in the World. The Northstar V8 is also fully competitive design that can age gracefully on the shelf, as V8s die a natural death.

Its very unlike the 1970's when GM was competing with an old V8 chopped into a V6 for Buick; new smaller V8s for others, and the infamous V8-6-4 crude, gasoline auto diesel conversion. Don't forget the push rod I4 'noise generator' for the Cavalier, either.

Those unequal days are gone. The final measure of any car company is Product. Have it, and you win; don't have it and you lose.

The toughest competition is in the so-called 'family car sedan' or C class. GMs' success in designing a direct first year offering the Malibu, that can go toe to toe against the Camry and Accord is the measure of how well GM has already adapted.

If their new generation offering in the class below that, the forthcoming Cruze can equal the success versus the Corolla/Civic will be fully back on the road to recovery.

The of course the Volt EREV and dual mode Hybrid design are class leading efforts. To date the 2 mode Hybrid has been used to rescue the now atrocious mileage of 5500-6500 # vehicles.

Who would have thought that a Cadillac Escalade or a Suburban can get 5 mpg more, using the exact same measuring yardstick, than the veritable VW mini-compact Beetle obtained, in the 1970s?

And do so while generating 1/100th the pollution? Who would have guess that the VW Beetle was a terrible gas guzzler?

When the 2 mode hybrid shows up in 3500 or 4000 # vehicles, like a Cadillac DTS, or STS, eyes will open at the mielage and performance achieved.

Axil:

Interesting analysis. I grew up in Michigan, and know the rust belt very well. I also spent some time on an assembly line also - and it is a miserable, miserable way to spend one's life at work. I can envision fewer jobs being nastier than working on an assembly line; maybe being a roofer or fruit picker in Florida year round.

In the rust belt context (as I experienced it), your comments "Arrogance, self-possession and this desire to dominate has plagued humanity unto it very beginning and has come home to roost on our America today" aren't exactly how I see it. I think many people experience the misery and do what they can to systematically eliminate or kill the pain - some people get married, make babies and immerse themselves with their families - but still stay on the assembly lines. Other people go to school and get engineering degrees - and they get the white collar jobs, but still within the factory context. Others still get advanced degrees in management and "compete" "dog eat dog" for the big pay and power of upper management of the manufacturing world. Some people get out of the manufacturing environment completely and go into government, retail, medicine, etc. (I'm in the "got out" category - thank God).

I hope America will remain a vibrant country, always full of options for everyone....we need balanced capitalism so there will actually be real rewards for hard work....but also mechanisms for safety nets for the not so fortunate....

GM is saddled with a debt liability even if they never bought another screw, or paid another salary, or sold another car, with their obligations to pay health care expenses to retirees not working for them anymore. I can almost sympathize with GM.

And I agree with HarveyD, that most of the retirees I know around here pay all their own health care costs. Also does GM still pay 100% of their employees insurance premiums??

According to a USA Today from June of 2005, GM paid 100% of its employees health care premiums, with an annual TOTAL out of pocket (including doctors visits and drug charges of $5/10 generic/name brand) of a single employee at $250, and $500 for an employee with a family. At the same time, a non autounionized worker in a similar company paid 16% up to 28% of their own health care premiums. These workers also had deductible ranging from $280 to $860, and a separate drug charges of $10/21 generic/name brand. And retires were still getting these same benefits after retirement.

The jist of what I am saying here is that retired unionized autoworkers have been getting enormous benefits, compared to a comparable employee at another company. GM is making amends to help with their continued liabilities, and their longterm economic health. There is no sympathy for autoworker employees, from the other general working public, who are paying their own health care premiums, doctor visit copays, and higher drug card co-pays.

I say, dont bite the hand that feeds you!

Anyone pondering the fortunes of GM might do well to look up the work of economist Micheal Hudson. US car companies are effectilvy put at a disadvantage vs central European compansies by the way the US tax system works. In Germany for example taxes on nonproductive assets such as property, the tax falls on the speculative rich and financial elites. In the US and the UK (a country with no car industry any more) the tax burden falls on industrial production via taxes on labour. In the US the situation is further biased as business involved in industrial production must also foot the bill for their employees health care.

Over time such a distortion has created a de-industrialisation of the US/UK in favour of generation of wealth through the government sponsored ramping of asset prices such as the recent property booms. Such a system also dramatically concentrates wealth in the hands of asset owners or rentiers comprising roughly of the top 20% of the population whilst the majority see static or falling wages and net wealth.

Businesses rise and fall like all other systems. Usually a major realignment of priorities, workforce and assets will give an aging institution an opportunity to rejuvenate itself. That's possible for GM today. If they can measure out the resources needed to get them to the introduction of new technology /products - they should do just fine.

And GM Europe is quite strong, recently announcing expanded investment of some $19 Billion in the Opel operations. One advantage of multi-nationals is cross-collateralization - a game invented by movie moguls.

Nick has a good point. Special treatment for capital gains should be abandoned -- give special treatment to dividends instead, which require profitable operations, not inflation.

Maybe the good that will come from Americans losing their healthcare benefits will be a reassessment of our expensive and ineffective healthcare financing system. Our healthcare is great (if you can afford it), but our financing and payment system sucks big time -- and is a burden on US industry. Take a lot of executives (former) off their insurance program and policy makers will hear about it.

HarveyD: You're in Winnipeg? I'm willing to bet your provincial health care premium is small fraction of what Neil's (the other Neil) parents would be paying in the US. The US is due for a major redesign/rebuild (starting with its energy infrastructure).

while all the toyota employees who post to the boards are giddy with joy...
perhaps the most telling and easily overlooked sentence is "Engineering spending in 2008 and 2009 will be held at 2006-2007 levels, substantially lower than original plans".
gm is shooting themselves in the foot if they are capping r&d spending. if one thing can get them out of the hole right now it's a crash course in small vehicle tech and development. a lot of people there are afraid though of what really needs to be done..junk/discontinue sales of large suv's and trucks and use all that money and all those shifts to produce smaller cars that americans will buy. not five years from now or ten years from now but today.
instead wagoner/lutz/etc. are still with one foot in the door waiting for gas prices to drop and people to rush out for more yukons and suburbans.
it's sad.
oh and axil all real americans are capitalists. i suppose you are either a communist subversive, or a canadian. only in america can a poor boy from hope, arkansas become president (an example even a democrat can understand). he didn't do it by handouts, but by hard work. THAT is capitalism in action.

For those using the USA vs the rest of the world argument, lets not forget that the majority of car makers have been in some kind of crisis in recent history. Look at Japan and we only have to mention Nissan, Mitsubishi, Mazda, Isuzu. In Europe, Volkswagen was in a bad shape very recently, Fiat is on the verge of collapse and the French car manufacturers had to be bailed out by the government on several occasions. In Sweden, Volvo and Saab could not maintain their independence. None of these companies can be accused of producing gas guzzlers that failed in the market. Similarly, for GM the picture is a lot more complex than just misreading the market. No one saw this coming 3 years ago and if Iraq had not happened, I doubt the prices would be as high as they are today and most likely we would all still be cruising in our fat SVU's like there would be no tomorrow. The oil price hike is irrational and mostly speculative. The trend could reverse at a moments notice when the demand plunges sufficiently and the surpluses start to slowly build. As a neutral observer, I would say that GM geared itself to making maximum profits, which is good for the company and shareholder alike. I would wonder, if they would have a Prius-like car in production right now, would their outlook be very different?
What could perhaps be said for GM is that their production technology seem quite inflexible. To make factories produce particular models only seems a bit dated in this age of production flexibility and customization. What a waste. It should have been possible to quickly retool such plants to produce more of the models that people want these days.

@ejj

This Dream That is America

The rendition of your life is quintiscentially American; a youth starting off poor, scraping some money together to get an education, then after school, the slow and tortuous climb up the corporate ladder. There is family, home, kids, bills. Finally a journeymen who is respected in his trade and a caring member in his society; having made it with only a vague memory of the early painful climb up the ladder.

This American ladder to success is losing its bottom rungs. These first dirty, dangerous repeticious, mind numbing jobs are going away by the millions and it is not by accident.

The corporate cabal and their political minions long ago decided to undue the American dream: that social contract between the young, the poor, the huddled masses that promised, if you work hard and played by the rules you can share in this dream that is America.

A new American nobility of wealth and privilege with no regard for the common man save to fight their wars, and shed the blood, through fiendishly clever political misdirection, in the dark of night, installed a framework that benefits the few at the expense of the many.

Their deceitful, corrupt, vicious and uncaring agenda has weakened us to the point of vulnerability to foreign interests that hate us to the core.

Our capital, the lifeblood of our society, leaves by the trillions to our blood sworn enemies.

C-130’s filled with 400 tones of hundred dollar bundles: 12 billon dollars are flown to Bagdad and tossed from the windows to pacify the mob that use it to kill our troops.

Have no doubt this is a war to the finish: total war: a war of no quarter.

Don’t just hope. Take the time to get beyond the misdirection and the deceit. Don’t be a pawn of this crowd and do your best to put us back on the road to that gleaming city on the hill: that dream that is America.

GM better get to bankruptcy court before a vulture makes a takeover bid. The stock price is very low.

w/o bankruptcy I doubt GM can shed enough liabilities.

Wagoner is able but, to paraphrase an old soldier: GM is in the toilet and the facts are falling upon them.

I am retired with health care. That seems likely to continue as the company is large and very profitable. But in the fine print almost every company says health care coverage is a company policy not a company obligation.

Unions can bargain for health care in their contract and it becomes a legal obligation.

Before sneering at GM and the dinosaur minds of Detroit managers we might consider that the US government is equally broke and has no hope of meeting future obligations.

And nearly every state, county, city, school district and transit district is too.

They have immense unfunded liabilities for retirement. Government employees retire earlier and get higher retirement benefits than are usual in the private section. And government has been free to falsify accounting to cover it up.

The Social Security fund consists of treasury promises. The obligations to military retirees are huge. A soldier may serve 25 years, retire and be pensioned for 50. The money simply has not been set aside.

Recently retirement accounting has been tightened but the public does yet realize how massive the problems are. And it is not a government problem, it is yours.

When a government needs money they borrow or tax or print it. The borrowing trick no longer works well. The printing trick makes the dollar worthless.

And the taxing trick takes what you own. Or think you own - ultimately government decides who owns what.

@ marc

oh and axil all real americans are capitalists. i suppose you are either a communist subversive, or a canadian. only in america can a poor boy from hope, arkansas become president (an example even a democrat can understand). he didn't do it by handouts, but by hard work. THAT is capitalism in action.

I am not a communist subversive, Canadian, democrat or republican.

I am a free thinker who wants the truth; who resents to the core, being lied to, manipulated, taken for granted, and above all, to be a witness to the diminishment of America.

I watch, and listen, and compare, and research. I just want the truth.

The value of the dollar is now a joke. In the basement of the Fed, the money presses are at warp speed; printing the money that will bail out our failed financial institutions.

The Fed chief faces both depression and hyper inflation; he is fearful, depressed and powerless.

Now, our dollars are used by third world refugees to wipe themselves.

Soon we will need wheelbarrows of money to pay at the pump.

The stock market is in the tank.

Soon there will be no capital to be a capitalist with. Its all in foreign lands who hate us to the core.

That poor boy was elected twenty years ago. Plenty of cronyism and corruption has transpired since then.

Doesn’t bother you to be treated like a fool; to be a puppet on a string; to see America flushed down the john? ………..It bothers me big time!

I have said this before, but in 1999 GM had a hybrid that got 70 mpg developed in the public/private PNGV program. If GM, Ford and Chrysler had produced anything like those cars, they probably would not be in the mess that they are in right now. You can lead a horse to water, but you can not make them drink. You can lead a car executive to a viable solution, but you can not make them think.

"Arrogance, self-possession and this desire to dominate has plagued humanity unto it very beginning and has come home to roost on our America today."

A once strong and vigorous America has slowly been bled of its lifeblood by those who, in their vanity, care more for their place in history than the welfare of the nation. That desire for legacy has led to their infamy and eternal damnation in the hearts of our people. Blind loyalty to incompetence and furtherance of the interests of the few can have only one result: an enfeebled and destitute nation."

"Were millions lose their homes; their life saving rent asunder in failed banks; the most stable and rich financial edifices collapse around our ears; take to heart the ultimate cause and make certain it cannot happen again."

Yes, YES, I'm with you. Halleluiah.
But, quick, who are we railing against?
I can't tell.
GM, the arrogant EV1 killer?
Toyota, the sinister Eco Spirit Cubic ES3 killer?
Unions, the selfish GM killers?
The politicians?
The Man?
Humanity?

I can't tell who I am either.

Yes Axil, The End Is Nigh! I suggest creating a large sign which states such, and brandishing it about in the street. You will likely get more attention that way.

Paging Mr. Jim Bakker...
Mr. Pat Robertson
Ms. Aimee Semple McPherson
Mr. Lonnie Frisbee
Mr. Oral Roberts
Ms. Gloria Copeland
Mr. Jimmy Swaggart
Ms. Tammy Faye Bakker...

Your brethren at GCC are calling.

In the early 1980's Lee Iaccoca was doing television commercials for Chrysler. Why? because they could not find anyone else who would do them (because the company was held in such low esteem).
GM and ford had one foot in the grave, too. Yet they came charging back into profitability.
Don't count them out.
For all their faults, the auto companies are about the scrappiest companies in america. Almost every other industry has shut down, but still cars are built in the u.s.a.

OldNeil:

We pay for both, the retained ex-employer health plan + our provincial health care (about $2200/yr for health cares + up to $700/yr for prescribed drugs per year/per capita). In our case, we do not pay the Government prescribed drugs plan because we get the same benefits from our ex-employer plan. Our Provincial governments (like most governments) never really pay for health care, unless they can print new money, which is not our case.

Nothing is really free except if you are a lucky GM ex-employee.