The "American Leyland" News Thread

Spectre

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This just in. From the "I know you're lying, your lips are moving" department and Yahoo/AP:

CEO vows better performance as GM exits bankruptcy
AP

By TOM KRISHER and KEN THOMAS, Associated Press Writers Tom Krisher And Ken Thomas, Associated Press Writers ? 28 mins ago

DETROIT ? General Motors completed an unusually quick exit from bankruptcy protection on Friday with ambitions of making money and building cars people are eager to buy. Once the world's largest and most powerful automaker, new GM is now leaner, cleansed of massive debt and burdensome contracts that would have sunk it without federal loans.

But GM, whose 40 days under court supervision was far shorter than anyone predicted, faces the worst auto sales slump in a quarter-century.

At a news conference, CEO Fritz Henderson said the revamped automaker will be faster and more responsive to customers than the old one. It will generate cash and repay billions in government loans ahead of a 2015 deadline.

The new company will build more cars and trucks that consumers want and launch them faster than in the past, the CEO said. GM also announced a partnership with eBay Inc. to test auctioning vehicles online.

"We recognize that we've been given a rare second chance at GM, and we are very grateful for that. And we appreciate the fact that we now have the tools to get the job done," he said.

Known for its sluggish decision-making process and bloated management ranks, GM will create a single, eight-member executive committee to speed up day-to-day decision-making, replacing two senior leadership forums.

Henderson, 50, said General Motors Corp. will streamline its bureaucratic management structure, cutting U.S. salaried employment by 20 percent, or 6,150 positions, by the end of 2009. The cuts include 450 executive jobs.

Henderson, who was promoted to chief executive in March, will run the global company and oversee its North American operations. GM's former chief operating officer, Henderson was chosen when President Barack Obama said former CEO Rick Wagoner's restructuring plans didn't go far enough.

Top executives at the new company will focus on business results, new vehicles, brands and consumers.

Bob Lutz, a legendary industry executive, was "unretiring" to become a vice chairman responsible for creative elements of products, marketing and customer relationships, Henderson said. Lutz, 77, had previously planned to retire at the end of the year after more than four decades in the auto business.

Nick Reilly, who has served as GM's Asia-Pacific president, will become executive vice president of GM's international operations based in Shanghai, China.

The new company will focus on customers, cars and culture.

"If we don't get this right, nothing else is going to work," Henderson said at GM's Downtown Detroit headquarters. "Business as usual is over at General Motors."

The automaker is launching a "Tell Fritz" Web site to allow owners and the public to share their concerns with senior management, and Henderson plans to go out on the road every month.

He said GM will partner with eBay in California to allow consumers to bid on vehicles just as they would in a typical eBay auction. They could also choose a "Buy it Now" option in an experiment to make car shopping easier. Dealers would still distribute the cars.

"As a culture, General Motors needs to be prepared to experiment and adjust," he said.

New Chairman Edward Whitacre Jr. said GM's trip through bankruptcy protection had been extremely challenging. "There have been a lot of long hours, there have been a shuttering of plants, there have been painful layoffs."

Whitacre told reporters after the news conference he expected to have GM's new 13-member board in place in about three weeks.

GM, in a viability plan presented to the government, said it would break even before interest and taxes next year, and be slightly above break-even for 2011 on a pretax basis.

"Sitting here today, I don't have any reason to disbelieve those numbers," Henderson said, giving no details of when the company would make a net profit.

The company's logo will remain blue with white underlined GM letters, although the company had considered changing the background to green to symbolize an environmental focus. GM has no plans to change the background, Henderson said.


He said the U.S. government, which owns a majority stake in GM, has vowed that it would not get involved in day-to-day decisions.

The Treasury Department released a statement Friday afternoon crediting GM's restructuring with saving both the automaker and "tens of thousands" of American jobs.

"The hard work of charting a path to viability now rests with GM's board and management," Treasury said in its statement. "But we are confident that we remain on track to ultimately see returns on these taxpayer investments."

GM received $19 billion to $20 billion more in federal aid on Friday, the remainder of the $50 billion it will receive, Henderson said. A large part of the money will be held in escrow.

Turning a profit will not be easy. GM has piled up losses and survives only because of government loans.

Besides the U.S. government's 61 percent controlling interest, the United Auto Workers union gets a 17.5 percent stake of the company through its retiree health care trust, and the Canadian government will control 11.7 percent. The remaining shares went to bondholders of the old company.

Concessions made by the United Auto Workers union just before the company entered bankruptcy protection have brought GM's labor costs down to where they are fully competitive with Toyota Motor Corp., Henderson said.

The parts of GM not moving to the new company will become part of "old GM," a collection of assets and liabilities that will be sold to pay creditors.

___

Ken Thomas reported from Washington, D.C.. AP Auto Writer Kimberly S. Johnson and AP Business Writer Jeff Karoub in Detroit contributed to this report.
So, what changed at GM during bankruptcy? Nothing. Why do they think they're going to do better, especially now that there is a government bureaucracy running the show????

The only good news is that Lutz is coming back... but I'm not so sure that's really a good thing at this point.

I predict the Tell Fritz site goes away within 90-180 days.
 
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tigger

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Well they removed 30-some odd percent of their bloated management, which would normally count for something. Of course, now they're predominantly owned by one of the biggest bureaucracies in the world, and one of the most useless unions ... so ... yeah. We'll see just how much quicker decisions are made when they're being 'vetted' by the likes of Nancy Pelosi.
 

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This just in - more bad news from the "new" GM; from the "Wasn't this supposed to save American jobs?" and the "Our Dear Leader Obama Motors" departments, via AP/Business Week:

Montana gov blasts GM mine contract cancellation

By MATTHEW BROWN
BILLINGS, Mont.

Gov. Brian Schweitzer is calling on the Obama administration to force General Motors to honor its contract with a Montana mining company instead of going overseas to buy the precious metals used to control vehicle pollution.

By failing to shield the platinum and palladium mines, the Democrat said Friday that the administration had shown a bias against his state -- at a time when other U.S. jobs were protected with a "buy American" clause in the $787 billion stimulus act. GM is shedding its contracts with Stillwater Mining Co.'s platinum and palladium mines as part of the automaker's emergence from bankruptcy protection.

Details of the case paint a complex picture: GM was effectively subsidizing production by Stillwater, often paying above market price for the metals. And since 2003, the mines have been majority-owned by a Russian company, Norilsk Nickel.

GM's reorganization is fueled by $50 billion in government loans. The loans are separate from the stimulus bill.

"When it comes to protecting the industries of the Midwest it's buy American first," Schweitzer said. "When it comes to Montana, they say buy anywhere but Montana."

The state's sole U.S. representative, Republican Denny Rehberg, said it was "beyond outrageous" that GM would use bailout funds to "move American jobs overseas."

Platinum, palladium and a third metal produced by Stillwater, rhodium, are used in catalytic converters to control car pollution.


Columbus-based Stillwater employs more than 1,300 people and runs the only mines in the United States producing the metals, about 90 miles southwest of Billings.

With platinum and palladium mined in just two other countries, Russia and South Africa, Schweitzer said GM's cancellation would put the U.S. at a strategic risk and hurt the mining industry.


A White House spokesman declined comment.

All the palladium and 70 percent of the platinum produced by Stillwater's mines had gone to GM and Ford Motor Co. Stillwater representatives won't give specifics on how much GM's contract was worth. It had been set to expire in 2012.

Stillwater Vice President John Stark said the contract cancellation will be challenged at a July 22 hearing in U.S. Bankruptcy Court in New York.

Detroit-based GM defended its decision to cancel the Stillwater contract, saying the deal had been "uncompetitive" and could have hobbled its efforts to repay the government loan.

"We will continue to make difficult decisions that best position the new GM for long-term viability," said GM spokesman Dan Flores. "There is an obligation to the taxpayers to provide a return on their investment to our company."

The contract set a floor price requiring GM at times to buy metals at prices above those on the open market. It also set production volumes, meaning GM had to keep buying a set amount from Stillwater even as its vehicle production fell from 9.2 million cars in 2006 to 8.4 million last year.

The Ford contract has similar terms.

At recent palladium market prices, the contracts had been shielding Stillwater from the equivalent of $57 million in lost annual sales, according to the company's filings with the Securities and Exchange Commission.

Norilsk controls 53 percent of Stillwater's stock.

If the Obama administration does not intervene and Stillwater fails to get relief through bankruptcy court, the company would have to file a claim for its losses and line up alongside the automaker's many other creditors.

It's not uncommon in such cases for creditors to walk away with pennies on every dollar owed.

Beyond its GM contract woes, Stillwater Mining has been hit by falling commodity prices that last year led it to shed 16 percent of its work force.

The company in May reported a first-quarter loss of $11.6 million, on revenue of $85.8 million. That's down from a 2008 first-quarter profit of $2.8 million, on revenue of $186.4 million.
I don't think there's any good answer to this one. It looks like a lose big/lose big proposition. It is quite odd in that if the objective of spending the best part of $800 billion on the country and the untold billions going into GM is to preserve American jobs and industry that they'd end the sole production point of platinum and palladium in the Americas and put all those people out of work in addition to denying strategic defense materials to ourselves.

Oh, wait, that's right. It wasn't protecting American jobs that was the real reason. It was protecting the jobs of union members who contributed big to Obama and the Democrats, and they didn't do that in Montana.

This is something I would support Federal aid on, instead of preserving the habitat of some stupid San Francisco harvest mouse.
 

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I found this interesting article today from 06/02/2009:

THE GENERAL MOTORS DEBACLE
A View from the Back Seat

By David Welch

Longtime General Motors reporter David Welch looks back on how America's premier auto company got trapped in groupthink.

To understand how trapped General Motors management became in its own version of groupthink, here's all you need to know: At one point in the early 2000s, the company's strategy amounted to outliving its workers.

As former GM Chairman and CEO Rick Wagoner explained in a story I wrote for BusinessWeek in February 2003, management's big-picture strategy was to wring out costs where possible within the confines of its union agreements, keep improving cars and trucks under car czar Bob Lutz, try to catch the Japanese in productivity and quality, and stay afloat until the middle of the next decade. By then, it figured, retirees would be dying off, GM's huge cost disadvantage for paying retiree pensions and health care would narrow, and it would be on more equal footing with competitors.

It might have made sense-if GM weren't underinvesting in new car designs, and if its profits at the time weren't coming from gas-guzzling SUVs and mortgages.

An Inevitable Endgame

It was, and they were. Both of those shortcomings became glaringly apparent. Within two years, fuel prices had soared and decimated truck profits. By 2005, Wagoner was cutting thousands of workers and looking for health-care concessions, and the company was in the process of losing almost $11 billion.

Now no one should be surprised that a company that suffered 40 years of nearly nonstop decline has arrived in bankruptcy court. The signs were apparent for years even to the casual observer. Journalists, analysts, consultants, and, yes, even insiders with the temerity to buck the system pointed out that GM's business was flawed and that the company was playing itself to an inevitable endgame. It had too many brands demanding new cars, advertising money, and executive attention to changing an image scarred by past quality problems. It couldn't sell the handiwork of its outsize network of factories and workers. Union contracts made quick downsizing all but impossible.

Why couldn't management, labor, and dealers see what was coming? Blame a combination of hubris, myopia, and short-term thinking. During my 10 years of covering GM for BusinessWeek, I heard plenty of explanations from GM insiders of why its business model couldn't be dismantled: It's too expensive to fight dealers and labor, so we shouldn't even try. We have to put money into trucks because Americans don't like fuel-efficient cars. The next new slate of models is the one that will reverse the sales slide. Hovering in the background of all these management arguments was the assumption that GM's size-its seat on the throne as the world's largest automaker-was an important asset that was not to be squandered.

Mired in "Profitless Prosperity"

But of course it was. GM only kept market share in the U.S. by buying it. Deals like 0 percent financing and fat rebate checks had GM briefly growing its share early in the decade, but at the expense of margins. That "profitless prosperity," as former Goldman Sachs analyst Gary Lapidus once called it, kept lots of people busy in plants. But it was GM's version of losing money on each item and making it up on volume.

See, GM viewed its market share the way Michiganders view their thermostat in February. If you want to be warm in Detroit, just crank up the thermostat and you can walk around your house in Bermuda shorts. When the bill comes the next month, you panic, turn the heater down to save money, and pull on a wool sweater.

GM would spend, say, $4,500 a car in incentives in a given month and drive its market share to 28 percent or so. As the cash flew out the door, profits cratered. Then GM would pull back spending, letting share slip down to, say, 23 percent. Up and down it went. But for most of the decade, market share fell and GM made much more money writing car loans and mortgages through its GMAC finance arm than making automobiles. With easy credit, rising home equity, and a robust economy, even GM's flawed strategy made a few bucks.

The Math Didn't Work

In fact, the company was severely exposed. In 2005, when housing started to slip and fuel prices spiked, GM began losing billions. In our May 9, 2005, Cover Story entitled "Why GM's Plan Won't Work," I suggested, among other things, that GM should cut rebates and money-losing deals to rental agencies and sell chiefly to the folks who like their cars enough to walk into showrooms and buy them at full price. It might have left GM with only 20 percent of US auto sales, instead of 26 percent at the time, but profits would improve.

How was that greeted? Former CEO Wagoner, who was fired by the Obama Administration this year, took me to task, saying that "anyone who thinks we can go to 20 percent doesn't understand our business." He meant that GM couldn't afford to pay the health-care and pension costs of all of those retirees if he let his sales fall too far. The math just didn't work.

He was right about the math-but only if you accepted the conditions GM had already set for itself. The answer wasn't to buy market share to keep plants going and bills paid; it was, as we said in the same Cover Story, to reset the cost equation, get the union to see things a different way. Cut retiree health-care benefits to meet the national average; that could have saved billions. Eliminate the JOBS banks, that pay-for-no-work clause that gave workers 95 percent of pay when their plant was idle, and cut workers without expensive buyout packages. I'm not saying I'm smarter than the people running the company. Far from it. They knew the problems. What was frustratingly absent was the will among management and labor leaders to see what was coming and embrace real change before it was too late.

UAW: Hamstrung by Members

Anyone inside GM management would say, of course, "Good luck with that." They're right. The UAW never trusted management enough to make big concessions. And let's face it, the UAW fought hard to win blue-collar affluence. It wasn't about to give it back without a fight.

Even Ron Gettelfinger, who is one of the most levelheaded leaders the UAW has had, was both unable and unwilling to alter Detroit's glide to bankruptcy. In some ways he was hamstrung by a membership that didn't want to lose what it had. But at other times he could be frustratingly intransigent. During an interview in 2006, just after GM had lost almost $11 billion, he told me that ditching the JOBS Bank in the 2007 labor agreement was out of the question. He said workers should not have to live with the fear of suddenly losing their job. Well, everyone else does.

Which brings me back to my original point about GM betting that it could outlive its workers. Wagoner figured that in the meantime, he would win customers with the cars produced by Lutz, and with fat sales incentives. But the plan only made sense as long as mortgage profits were rolling in from GMAC; there was no margin for error if housing or car sales tanked. And it had one other big flaw, which became more obvious as time went on: The company couldn't generate enough cash to freshen its models and fund R&D at the pace set by its rivals. (Former Merrill Lynch analyst John Casesa pointed this out year-in, year-out in his annual Car Wars report.)

Not Solely Labor's Fault

By 2006, GM was running low on cash. As its options narrowed, GM had to sell 51 percent of GMAC to raise cash and the strategy of waiting out the problems gave way to a different kind of groupthink. GM figured it would buy its way out of its problems. And in fairness, labor contracts and dealer franchise laws meant that whenever GM wanted to make major changes, someone had to be bought out. A few billion in restructuring costs thinned the workforce and in 2007, GM planned to hand the United Auto Workers $35 billion to set up a trust fund that would take care of retiree costs. It was a big change for Detroit and its union, but the company needed everything to break right: The car market needed to stay healthy until 2010, when the health-care fund would take over and give GM a new lease on life. As we know, it didn't work out that way.

Let's be fair to the UAW. This isn't solely labor's fault. Thanks to the SUV boom of the '90s, there was money sloshing around inside GM. Longtime GM watcher Maryann Keller has noted that GM has paid in the neighborhood of $20 billion in stock dividends and for share buybacks since the mid-1990s. That cash could have been socked away to pay for health care instead of giving it to investors, or invested into R&D. But stockholders want a return and executives get bonuses if stockholders are happy. By the way, while GM was paying a dividend, the company cut capital spending and borrowed $14 billion to shore up the pension fund.

Another great example of how things looked from within the GM bubble: When former Chrysler star Lutz emerged from retirement in September 2001 to join the company as vice-chairman, it was common industry wisdom that GM's cars and trucks suffered from the corners that were cut on GM's product decisions by bean counters and manufacturing gurus.

Lutz Fought for Style

Styling isn't free; the stamping machines that make more curvaceous car bodies cost a lot of money, as do posh interiors. Lutz fought for these enhancements, knowing that Toyota's and Honda's emphasis on aesthetics was one of the reasons why they dominated the car market. One GM executive told me that, before Lutz, the company figured its dealer network and market presence were so big that cutting corners on their new models would be fine. They would get the buyers anyway and save a few bucks on everything they sold. The rest, as they say, is history.

A similar kind of thinking went into GM's battle against fuel economy. With its labor costs and retiree burden holding GM back-and no will to change that-GM ignored cars and plowed money into higher-margin trucks. In September 2004, when oil prices started flirting with $50 a barrel, I wrote a column entitled "Detroit Is Over a $50 Barrel." It argued that if fuel prices stayed high, Detroit wouldn't be able to react. While GM was introducing the Chevy SSR, a combination of a hot rod and a pickup, Toyota was boosting production for the Prius hybrid. Toyota was ready, GM was not.

Blame Wagoner if you want. But he inherited many of these problems and was making some of the right moves before he was fired. He couldn't get the company and those who depended on it to make enough sacrifices to get the job done. However, even an outsider like Bob Nardelli, a lauded cost-cutter who came to Chrysler after turns at General Electric and Home Depot, found few options in Detroit.

Wiping Out Debt

Now, with the guiding hand of the Treasury Dept. and the Obama Administration leading GM through what looks to be a fast bankruptcy, many of its intractable problems will be addressed. Billions in debt will go away, leaving a relatively clean balance sheet. Stock in a new, leaner company will seed the health-care trust; that will get GM out of the medical-benefits business. The UAW has made other concessions to align factory costs with those of Toyota. Four weak brands are going away, giving GM a crack at building four strong ones.

In about three months, Treasury has enabled GM to accomplish what decades of managers, dealers, and labor leaders were unable or unwilling to do. It's a shame that many of them won't be around to benefit from that.

Welch is BusinessWeek's Detroit bureau chief.
Source: http://www.spiegel.de/international/business/0,1518,628070-2,00.html

I agree with most of the article, except the conclusion at the end. It's far from over for GM yet.
 
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argatoga

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http://voices.washingtonpost.com/achenblog/2009/07/guest_kit_why_cant_i_buy_a_cam.html
My Futile Effort to Help the American Auto Industry

By Vijay Ravindran

I wanted a Chevy Camaro.

I'd never really liked American sports cars before. But the 2010 Camaro -- a revival Chevrolet has been talking up since 2006 -- is so much more sleek than your typical muscle car. And since my BMW 330 started showing its age (nine) around the same time that the death of the U.S. auto industry hit the headlines, I thought: Why not do a little something to help?

So, after seeing a newspaper ad promoting Camaros at a local Chevy dealer, I called and left a voicemail saying I was interested in a test drive.

I never heard back.

I was shocked. Here I was, ready to buy, while GM was in financial straits. I thought they'd be all over me. Turns out it's not so easy to obtain a piece of the American dream.

The next week, I decided to widen my search. I e-mailed four Chevy dealers in the area. Two never wrote back. One replied that they had no Camaros, and ended the correspondence right there. The fourth said they'd have one soon -- just stay tuned.

Dealer 4 began to check in periodically -- pitching Camaros that I could buy sight unseen. I reminded him of my request for a test drive. Then I reiterated my request for a test drive. Then I absolutely insisted on a test drive. And, eventually, I ended up with an appointment. But after driving 45 minutes to the dealer, I found that the one Camaro they'd gotten in was an automatic (I'd asked for a manual transmission) and that I wouldn't be allowed to drive it, just sit in it on the lot. The sales person tried to get me in a Corvette and to convince me that transmission is the same (it's not). I left the dealership, dejected, but not yet ready to give up.

Three days later, I got an e-mail:

Hello Vijay,

I know that we have been diligent in our follow-up, however, we have not reached an agreeable time for you to come in. Is there something more we can give you?

If not, can we assume that you are no longer in the market to purchase a vehicle and be taken out of our follow-up system?

Thanks.




The last of my dealers had abandoned me. And so I abandoned my effort as well. I still hope that someday I may get a Camaro. I'm just hoping my BMW holds out long enough for supply to catch up to demand.
 

gaasc

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GM fails at the most simple of things: GET STUFF TO THE CONSUMER
hinestly they should just dissolve the damn thing and sell the companies one by one i'm pretty damn sure we would get some quality stuff along the way, perhaps after a hiatus

on a unrelated note, whatever happened to the guy who ordered a camaro and then the dealership owner's son took it to ?the prom?
 

thedguy

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GM fails at the most simple of things: GET STUFF TO THE CONSUMER
hinestly they should just dissolve the damn thing and sell the companies one by one i'm pretty damn sure we would get some quality stuff along the way, perhaps after a hiatus
There is little they can do about the dealerships.

On that subject, anyone know how the whole dealership/manufacturer relationship works and why there are laws in place that prevent the manufacturer from just selling cars directly?
 

Spectre

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There is little they can do about the dealerships.
You mean other than closing the ill performing and customer-enraging ones? Like they just closed thousands of dealers? Oh, wait, they can only close those dealers that are "politically inconvenient" for their government masters.
 

thedguy

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You mean other than closing the ill performing and customer-enraging ones? Like they just closed thousands of dealers? Oh, wait, they can only close those dealers that are "politically inconvenient" for their government masters.
Before the AL/Obama-motors debacle could they even do that without a LONG drawn out court battle?
 

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OMG - I bet that there is a field somewhere stuffed to the gunnels with Camaros costing GM shedloads to keep on stock. Oh dear oh dear. ...

This is American Leyland - I laughed when I read "The new company will build more cars and trucks that consumers want and launch them faster than in the past, the CEO said". Now what makes him/them think that they can do that?

What would be the point if the dealers screw up?

One obvious route to improving dealer quality is a continuous programme of "secret shoppers". Get a bad experience delaership gets wrist slapped. Get two - contract terminated. Still we will see. Presumably re-badging and nationalising OPELS is now out of court?
 
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argatoga

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They can't terminate contracts easily due to franchise protection laws.
 

Spectre

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Before the AL/Obama-motors debacle could they even do that without a LONG drawn out court battle?
If they'd done a normal Chapter 11 bankruptcy back when they still had some cash (Europeans: This is allowed under US law) and before they went for the government buy/bailout, became American Leyland/Obama Motors and then went for an Obamaruptcy, they could have easily done it. All contracts would have been void, all dealerships would have had to sign new contracts with mandatory performance and quality metrics.

Easily solved. But they didn't do it that way.

Another way to do it short of that is the "you ordered what? hahahahahaha- no." technique I've seen Nissan use to discipline dealers.

They can't terminate contracts easily due to franchise protection laws.
You can in bankruptcy.
 
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Spectre

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From the "New GM - just as dumb as the old GM" and "Our Dear Leader Obama Motors" departments and the Toronto Star comes this:

Eau de bailout
New GM to launch fragrance line

Plans to launch line of scented products for men on Cadillac's 100th anniversary seen as 'silliness'
Jul 22, 2009 04:30 AM
Tony Van Alphen
BUSINESS REPORTER

It's not the smell of the interior of a new luxury model, the whiff of gasoline or even the aroma of burning rubber.

It's much more. It's the luminous fresh scent from grapefruit and camomile and a mix of geranium, tarragon and cinnamon ? plus sweet spice and incense.

Think of "Cadillac, the new fragrance for men."

Sputtering General Motors Co., just out of a quick drive through bankruptcy court, will soon be using its iconic Cadillac brand to sell a line of fragrance for men.

Beauty Contact Inc., a Dubai-based cosmetic company and holder of the fragrance licence, said yesterday it will launch the Cadillac line in stores this fall to mark the brand's 100th anniversary.

"Cadillac, the new fragrance for men is part of the recent Cadillac renaissance: Hot new products and redesigns that capture the mantra of life, liberty and the pursuit," said Alwyn Stephen, a Beauty Contact director.

"Our fragrance is a relevant extension of the Cadillac lifestyle."

The line includes a spray, aftershave lotion, deodorant stick, hair and body wash. Some products will come in translucent glass bottles with sleek metal caps. The retail price for a 100 millilitre bottle of the eau de toilette fragrance will be $73.

"The design pays tribute to the opulence and extravagance of past eras, as well as the luxury and ease of today," the firm added.

But marketing expert Alan Middleton, a York University professor, said it's a bad example of brand extension and indicative of a troubled company. In the past, GM has licensed fragrances for Hummer, Chevrolet and Corvette.

"Anybody who knows anything much about branding would know this is about as bad an idea as when Roots tried to brand an airline," Middleton said.

"Neither Porsche nor BMW nor any other transportation brand that has tried this silliness has been very successful."
So, who do they think is going to buy this crap?

Maybe they should, I don't know, concentrate on making better cars. Oh, wait, they don't have to because now they're run by the government.
 

gaasc

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YEAH!! we are going through a giant crisis, nobody is buying our products and the taxpayers are keeping us afloat, lets sell some perfume


honestly <_<
 

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No doubt it's a stupid idea but on the other hand, it doesn't seem like GM's gonna be in charge of selling the parfumes. They will just collect the licence fees and the rest is the cosmetic company's business, so after all, why not?
 

Spectre

The Deported
Joined
Feb 1, 2007
Messages
36,754
Location
Dallas, Texas
Car(s)
00 4Runner | 02 919 | 87 XJ6 | 86 CB700SC
Not in this one. Politicians won't let them.
True - but if they'd gone through a normal bankruptcy before becoming beholden to the government, they could have done so. Along with killing the unions. They decided not to do that, so their problems continue.

Typical, Spectre had a similar story posted on here some time ago.
Yup, and I'll post it again as it seems nothing has changed over at "The New GM."

Yeah, they did try to screw me. And in my case, it wasn't even a question of money.

What I wanted was simple - black GTO with black interior and the manual transmission. I went to or called literally every Pontiac dealer in a 250 mile radius. I didn't care about the price. I was willing to pay sticker (i.e., the dealer-marked up price on the window, not the invoice price) plus the usual fees, no haggling involved, immediate payment via wire transfer - an easy sale, right?

I experienced terrible customer service ("Leisure Suit Larry" would have felt right at home) and outright stupidity. *Nobody* would sell me what I wanted. They kept trying to foist off automatic cars or cars in colors other than black. Now here's the thing - I was willing to pay the window sticker price with no haggling - and still no Pontiac dealer would sell, find, or order what I wanted. It wasn't even a matter of "It doesn't come that way," which I could understand if that was the truth (it wasn't); it was purely "We can't be bothered to order it."

I even called GM's Customer Relations number to see if I could order one directly. I mentioned that I was coming in from the import world and was one of the "conquest" sales they so desperately wanted. I also complained about one dealer whose behavior I found particularly offensive. GM's reaction: "You have to order through your local dealer. Ya gonna buy a car from us or what?"

I chose "or what" and promptly did what I should have in the first place. I crossed the GTO off my list and bought a pre-owned Jaguar XKR convertible for *less* money.

And GM wonders why nobody will buy their product....
No doubt it's a stupid idea but on the other hand, it doesn't seem like GM's gonna be in charge of selling the parfumes. They will just collect the licence fees and the rest is the cosmetic company's business, so after all, why not?
It's a bad idea because it dilutes their brand identity at a time when they simply cannot afford to do so.
 
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