Although US President Obama said yesterday, his government has “no intention of running GM,” by showing the Detroit automaker’s CEO the door, changing its boardroom lineup and guaranteeing its product warranties—hey, Barry, guess what?—you’re now running the second largest car company in the world.
Welcome to the new General Motors: aka Government Motors. And already, in its evaluation of the automaker’s viability plans submitted back in February (as an argument to receive more bailout money) the Detroit automaker’s new executives in Washington are pointing out some harsh realities that GM’s old brass would never admit too:
• over 12 years after its debut, GM never was able to come up with a flagship green car to compete against the Toyota Prius;
• it continued to support eight brands as its US market share plummeted from the mid-40 to the current 20 per cent range;
• and the Chevrolet Volt—the gas-electric plug-in that was to be the GM’s halo car and ready for sale in 2010—will simply cost too much to be a commercial success.
Over at Chrysler, the future is both clearer and dimmer.
Washington highlighted what most industry watchers (and former parent Mercedes-Benz) already know: Chrysler relies too much on trucks and SUVs for profits, and it’s too small of a player to go on independently. The ultimatum: get the deal done with Fiat in 30 days, or the bailout money tap runs dry.
Thirty days. Think about it.
From the venture capitalist team at Cerberus who took over the automaker from Mercedes back in 2007 (and led by a former hardware store exec) that doesn’t have any idea on how to run a car company? Er, good luck with that.
The cold reality is that both GM and Chrysler may end up in bankruptcy court to shed unrelenting debts before the Canada Day long weekend.
The other slap-in-the-face/wake-up-call from yesterday’s historical pronouncements was directly aimed at the unions: make concessions on wages and benefits or else your employers will not exist.
Do you think 60 days is enough to turn GM around?
Or how about half that time for Chrysler?