GM & Chrysler Look for $35 bn Combined

17 Feb

I’m not a bank aficionado, so don’t ask me about the bailouts or the Swedish model for nationalization or anything else. I haven’t read the stimulus bill signed into law today, so don’t ask me about that, either.

I do know, however, that GM and Chrysler are in trouble after 3 or 4 decades of making cars and trucks that are/were, for the most part, a bunch of crap. The Dodge Charger I rented in Vegas was nice enough, but it was rough enough around the edges that I’d never consider buying one. The Dodge Caravan I rented in Florida last year was adequate, but seemed to be light-years behind the class-leading Honda Odyssey. GM has gotten better, but not across the board, not for every car.

So, GM needs $30 billion, will eliminate 20,000 jobs by 2012, and will put Saturn to death by 2011 and consider getting rid of Hummer, too.

Chrysler needs $5 billion, and will eliminate a few thousand jobs.

If I was GM, I’d throw out the Saturn name and just import or build Opels, and let the Germans run it. I’d sell Hummer, and I’d re-configure the entire operation to enable it to be quicker to market with new cars, and get plants to be as modern and efficient as those anywhere else in the world. If I was Chrysler, I’d hire some new designers right away and start an entire new line of vehicles across the board. Jeep should have 3 – 4 models, and Chrysler should focus on luxury while Dodge focuses on muscle cars like the Challenger, and mid-range passenger cars. The Fiat deal gives Chrysler access to small, fuel efficient cars, and luxurious stuff like Alfas.

Every SUV should be available with a common-rail diesel engine for economy. Every car should have a diesel or hybrid engine option. GM and Chrysler both need to innovate not just in terms of engine technology, but also with respect to interior design and perceived quality. It doesn’t take much – hell, just copy a new Hyundai and it’d be an improvement over all of what Chrysler shits out and half of what GM bothers to try and sell.

When the car market is in a slide, the most innovative and economical cars are going to do well. GM and Chrysler don’t have too many of those, but Honda is going to sell a $19,000 4-door Insight that gets close to 60 MPG. Honda’s sales may be down, but it doesn’t have its hand out. During the SUV boom, it chose to innovate with the Pilot and Ridgeline while still investing in the Insight and Civic hybrids. Toyota built 4Runners and Highlanders, but it also built Echos, Yarises, and Priuses.

GM? It built Silverados, Cobalts, and a decade’s worth of awful Trailblazers. Chrysler built fugly Sebrings and $40,000 Grand Cherokees with rental-car interiors. No wonder they’re in trouble.

Their paths to salvation don’t lie in staff reduction or bailouts or plant closings. They must innovate and build cars that can compete with the Germans, the Japanese, and most pathetically, the Koreans – the country that gave us a joke called a “Hyundai” in 1985, and now builds the Genesis, which puts most of GM’s cars to shame.

3 Responses to “GM & Chrysler Look for $35 bn Combined”

  1. Jay February 17, 2009 at 9:05 pm #

    Does anyone remember the diesels that were built by the big three back in the 70’s? If it were sold here I would have looked at Ford’s diesel that they are selling in Europe. It is my understanding that the Japanese are selling diesel vehicles in Europe. I now have my second VW diesel, a 2009 Jetta. It is a slightly bigger engine than the 2001 Jetta engine but there is more power and the six speed standard shift is smooth. I am not trying to plug Popular Mechanics but you can check out their Jetta diesel reviews at the http://www.popularmechanics.com. Look under Drive Green, Solving the Fuel Crunch

  2. hank February 17, 2009 at 10:50 pm #

    Alan–a Rant after my own heart. And I believe your analysis to be spot on—Bailouts aren’t going to help.

    As I often told customers in the 90’s who were buying replacement CS series Delco Alternators—It’s just a rebuild of a shitty design alternator….that’s why you get a lifetime warranty. Ford also had melting 4, 6 and 8 cylinder car alternator wiring harnesses and Taurus power steering hoses that would pop off the pump at just the right time.

    Needing to replace an entire door panel on a Venture van because the radio speaker blew out of it is an exercise in over-engineering. What do you do when the van is 10 years old and GM has discontinued the door panels–Punt?

    But I think some would still like your take on the President’s first news Conference and the Stimulus bill. Been awful quiet in many left side corners lately.

  3. WNYwatercooler February 17, 2009 at 11:49 pm #

    It was my understanding that Honda Toyota etc get help from their government in the form of subsidies for health insurance etc, GM Ford and Chrysler don’t have that.. it is far from an even playing field

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