General Motors: Still on the Fritz
If you’ve been following the news out of the US recession at all, you’ll be aware of how General Motors recently beat all the experts’ expectations by successfully reorganizing under American bankruptcy laws (“section 363” and twenty-three skidoo!) within the actual forty days that the company and the Obama administration claimed was all that was needed. But according to Matthias Ruch, New York correspondent for the Financial Times Deutschland (GM, the little giant), it’s all going to be uphill from here on out. From his lede: “Opel’s mother-company is now celebrating her own rebirth. But this new beginning is more form than substance [German: mehr Schein als Sein]: the former auto-giant is just blundering on aimlessly.”
That rapid reorganization was indeed an impressive achievement, though it necessarily had to be accomplished in broad, slashing strokes: $40 billion in debts were canceled outright, and the former auto-making colossus was split into a “good” and a “bad” company, the latter (now with the catchy monniker Motors Liquidation Company, if you’re in the market for some cheap assembly-line equipment) now little more than a pile (better in German: a Schrotthalde) of discontinued brands and factories. But Ruch lets us know that the new company still retains financial “obligations” in the double-figure $ billions range.
All happy-talk aside, GM not doing well, in his estimation; indeed, the company is making a fool of itself. Exhibit A is the website it recently set up called GM Reinvention. Go ahead, check it out yourself; straight from the heading there at the top of the video-window, “What Fritz is learning from ‘Tell Fritz,’ you should be able to sense that something is very wrong. This is not a sales website; this is a faintly pathetic mea culpa, “please-like-me” website, the artifact of a quintessentially Industrial Age firm trying to make it in the Internet Age. As Ruch phrases it, “Young and lively is what the new concern wants to be, modern and green. Completely different than its rusty, massive predecessor.” You can add to that “cool”: it’s been a long, long time since anything GM produced was ever “cool,” yet the “new” company is striving very hard somehow to be that. But c’mon – with CEO Fritz Henderson (pictured) as frontman? Ruch:
But the fifty-year-old with the fleshy head and monotone voice is hardly any Barack Obama. Strained, with a motionless expression he cranks out pre-formulated sentences: “It is important to learn from the past,” he preaches. “He who does not learn from history is condemned to experience it again.” Sounds right. But boring.
It also sounds like George Santayana, the turn-of-the-last-century American philosopher, but I suppose properly attributing one’s quotations would be too “unhip” for the current GM media strategy. More importantly, though: Is there any evidence that the new GM management actually has learned from its most-unfortunate recent history? It seems to be leaning heavily on its electronic car, the Chevy Volt, to turn around its fortunes, but that won’t be on sale until 2011 and Ruch terms its contemplated sticker-price “uncompetitive.” Meanwhile, there is already abundant evidence that operating under the concern’s new set of owners – namely the US and Canadian governments, as well as the United Auto Workers as represented through something called the Voluntary Employee Benficiary Association – may not be the way to go. Company officials wanted to shift production of some remaining lines to Asia; that plan was vetoed. They wanted to set up a new plant for producing small, economical cars down in Mexico; that was not only vetoed, but the company was ordered to establish it in higher-cost Michigan – prime UAW territory! – instead.
Still, ol’ Fritz’ stiffly-grinning mug remains there on that GM Reinvention site. Here at €S we’re a bit busy, also a bit shy, and (actually!) not even American, and so not inclined to take advantage of the “Tell Fritz” facility there. If others are, though, here a couple of zingers you might try:
- The new GM’s grand plans to return to the black by 2011 and then issue shares to help retire its debt to the US and Canadian governments presumably depend heavily on the company actually producing vehicles that consumers want to buy. So how does he explain only one GM offering, the Chevy Cobalt, taking any of the top-ten spots of autos bought under the US government’s “Cash-for-Clunkers” program – and dead last at #10, at that? (But see also this report from the Washington Post, which unfortunately muddies this issue a little bit.)
- The new GM’s grand plans etc. etc. presumably also depend heavily on the company actually producing vehicles that the US and Canadian governments (its main shareholders, after all) want to buy, so how does he explain the General Services Administration’s apparent marked preference for Ford?
