White House tells GM boss to step down

[Neil]

If you can't blame the CEO for years of mismanagement and producing an $80 bn loss over the last two years, who can you blame?

If quote unquote mismanagement were the sole or primary reason for the loss then he would deserve to be sacked.  But it seems in this case mismanagement is being used as a synonym for bad outcome.

For example I caught a soundbyte on the news which made it sound like part of the White House bill of particulars against Wagoner was that he didn't "negotiate strenuously enough with labor unions and GM creditors."  Does that seem fair to you?  If the unions and lenders don't give up enough to restore GM to profitability is that Wagoner's fault?

Ceding the high-efficiancy market to Honda and Toyota could be considered mismanagement, as could maintaining the bloated multiplicity of brands, many in direct competition with each other.

[Admiral Yi]

Ceding the high-efficiancy market to Honda and Toyota could be considered mismanagement, as could maintaining the bloated multiplicity of brands, many in direct competition with each other.

What do you mean by high-efficiency market?

I agree about the brands, but others have said dealership arrangements impose restrictions.

[Neil]

What do you mean by high-efficiency market?

Cars that get good gas mileage like Prius, Civic and Corolla.

[Admiral Yi]

Cars that get good gas mileage like Prius, Civic and Corolla.

You do realize that Detroit sells smaller cars at a loss, don't you?

[Caliga]

Of course they aren't his fault.  The White House just needs a scapegoat in this case.

If you can't blame the CEO for years of mismanagement and producing an $80 bn loss over the last two years, who can you blame?

Jaron.  Duh.

[Neil]

Cars that get good gas mileage like Prius, Civic and Corolla.

You do realize that Detroit sells smaller cars at a loss, don't you?

And yet well-managed companies make money, and smaller, more efficient cars are the future.  Their mismangement has put them in a position where success is impossible.

[Admiral Yi]

And yet well-managed companies make money, and smaller, more efficient cars are the future.  Their mismangement has put them in a position where success is impossible.

Legacy benefits add $1,500 to the cost of each GM car.  There's also a quality perception gap of about $2,000--i.e. consumers think GM cars are $2,000 worse than they really are.  So to go head to head with the Nips GM has to build a car that's $3,500 better and price it the same. 

Now you can argue that the quality perception gap is just GM's chickens coming home to roost from the crap they put out in the 70s.  But I don't see how you can pin that on Wagoner.

[saskganesh]

If you can't blame the CEO for years of mismanagement and producing an $80 bn loss over the last two years, who can you blame?

If quote unquote mismanagement were the sole or primary reason for the loss then he would deserve to be sacked.  But it seems in this case mismanagement is being used as a synonym for bad outcome.

For example I caught a soundbyte on the news which made it sound like part of the White House bill of particulars against Wagoner was that he didn't "negotiate strenuously enough with labor unions and GM creditors."  Does that seem fair to you?  If the unions and lenders don't give up enough to restore GM to profitability is that Wagoner's fault?

that wasn't the only reason he was fired though. they had a list. since the company is in crisis and on tax support in as many countries as they can get cash from, it's not business as usual. but in the end, the buck always stops at the top. and Wagonboy himself being now has 20 million reasons why this is a good thing.

[Neil]

And yet well-managed companies make money, and smaller, more efficient cars are the future.  Their mismangement has put them in a position where success is impossible.

Legacy benefits add $1,500 to the cost of each GM car.  There's also a quality perception gap of about $2,000--i.e. consumers think GM cars are $2,000 worse than they really are.  So to go head to head with the Nips GM has to build a car that's $3,500 better and price it the same. 

Now you can argue that the quality perception gap is just GM's chickens coming home to roost from the crap they put out in the 70s.  But I don't see how you can pin that on Wagoner.

Actually, what the quality gap means is that consumers will pay a $2,000 premium to avoid driving a GM.  It has nothing to do with the actual quality of the car.

Still, GM has failed to close all their American factories and outsource the jobs to other countries.  They have failed catastrophically.

[Admiral Yi]

that wasn't the only reason he was fired though. they had a list. since the company is in crisis and on tax support in as many countries as they can get cash from, it's not business as usual. but in the end, the buck always stops at the top. and Wagonboy himself being now has 20 million reasons why this is a good thing.

Do you remember what else was on the list?

[Zanza]

Cars that get good gas mileage like Prius, Civic and Corolla.

The Civic and the Corolla are really great products, the Prius is more of a marketing bubble. It's actually not getting better mileage than say Civics or Corollas with modern engines. And the production of hybrids is so much more resource intensive that whatever would save in fuel consumption would still not compensate what you had to put into it in the first place.

[Neil]

Cars that get good gas mileage like Prius, Civic and Corolla.

The Civic and the Corolla are really great products, the Prius is more of a marketing bubble. It's actually not getting better mileage than say Civics or Corollas with modern engines. And the production of hybrids is so much more resource intensive that whatever would save in fuel consumption would still not compensate what you had to put into it in the first place.

That's not the point.  The point is that out of the top ten cars in the US last month, spots 1-6 and 9 are owned by foreign manufacturers.  Out of roughly 140,000 top ten cars sold in February, more than 3/4 of them were from Toyota, Nissan, Honda and Hyundai.  And this is in the Big Three's backyard.

They have primed themselves for failure by allowing the largest section of the market to be taken away from them.

[Razgovory]

Legacy benefits add $1,500 to the cost of each GM car.  There's also a quality perception gap of about $2,000--i.e. consumers think GM cars are $2,000 worse than they really are.  So to go head to head with the Nips GM has to build a car that's $3,500 better and price it the same. 

Now you can argue that the quality perception gap is just GM's chickens coming home to roost from the crap they put out in the 70s.  But I don't see how you can pin that on Wagoner.

Where did you that number?

[saskganesh]

that wasn't the only reason he was fired though. they had a list. since the company is in crisis and on tax support in as many countries as they can get cash from, it's not business as usual. but in the end, the buck always stops at the top. and Wagonboy himself being now has 20 million reasons why this is a good thing.

Do you remember what else was on the list?

first off I don't watch your tv programs. If you don't pay attention, I cannot help you. 

offhand: failure to properly downsize, failure to come up a plan to merge/buy Fiat (or anyone else), failure to reform dealer network, not just failure to negotiate with bondholders and union.

[Admiral Yi]

Where did you that number?

$1,500 from TV (CNN?), $2,000 from Time.