gm should drop hummer

[vador99]

York: GM Should Drop Saab, HUMMER




York: GM Should Drop Saab, HUMMER
Company has 1000 days of cash left, Kerkorian’s wingman says.
by Joseph Szczesny (2006-01-10)



The prescription for fixing General Motors is fairly straightforward but requires some tough action including the elimination of unneeded brands such as Saab and HUMMER, slashing the dividend and reducing the compensation of the board of directors and senior executives, says Jerry York.



York, an advisor to Kirk Kerkorian's Tracinda Corp., told the Society of Automotive Analysts that GM needs to recognize that "time is of the essence" and GM's management needs to create and galvanize change. Otherwise the company is on course to burn through its cash at a rate of $24 million per day, which means it will use up the balance of its cash reserves of $30 billion in about 1,000 days.



Bold and decisive action is needed to demonstrate that GM's management understands the problems and is willing to tackle them head-on, said York, who laid out a program of tough love for the struggling corporate giant.



"Although there are some people in this town that aren't there yet, in my mind this situation calls for the company's going into a crisis mode, adopting a degree of urgency that recognizes if things don't quite break right, the unthinkable could happen," said York, a former Chrysler and IBM executive, who has been advising Kerkorian on the ins and outs of the car business for more than a decade.



York also urged GM to revive the concept of equality of sacrifice that was used successfully more than 25 years ago to help revive the Chrysler Corp., which avoided financial catastrophe with the help of a government bailout. "In 1980 when Chrysler went to the Federal Government and requested loan guarantees, the government basically said, "Before we're willing to help to help, all of Chrysler's constituencies are going to have to kick in," York said.



"There was a lot of gnashing of teeth to get it all done but at the end of the day it worked," added York, who also quoted approvingly recent remarks by UAW President Ron Gettelfinger on the need for shared sacrifice. York's remarks also were a subtle rebuke to his old colleague Robert "Steve" Miller, the chief executive officer at Delphi, who has demanded major concessions from Delphi's hourly workers, at the same time he submitted a plan for rewarding top managers after the bankruptcy.



GM's board of directors also should reduce the company's 50-cent per share dividend and trim their own compensation by 50 percent. GM also should move down the corporate pyramid and reduce the compensation of top executives as well, York said.



GM, in many respects is a sound company operationally and has made huge progress in quality and productivity, he said. However, it isn't clear that GM has gone through the kind of all-encompassing review of cost structure which took place during the 1990s at Chrysler and IBM, he said.



In addition, GM must do more to rationalize its sales and marketing efforts, added York, who said he believed that Mark LaNeve, GM vice president of vehicles sales, service and marketing had the toughest job in the company. "Why does GM still own Saab?" York said. "HUMMER - this product line is most profitable but is it core? GM indicates HUMMER generates a high rate of first time GM buyers. But that's not the question in my mind. The real question is, 'Do first-time HUMMER buyers go on to buy Cadillacs or GM Trucks?'"



"If that's the case, then I guess it might be the correct decision to keep HUMMER. But even then, I'm not sure, given GM's substantial brand complexity and need to assure adequate liquidity," York said.



Fritz Henderson, GM's new chief financial officer, told reporters after York's presentation that he agreed with a lot of what York said. "To be honest I am in crisis mode," but he said would not discuss possible pay cuts or a change in the dividend with the board. Henderson also said he did not believe GM had to drop the Saab or HUMMER brands.



Meanwhile, Gary Cowger, the GM executive responsible for company's worldwide manufacturing operations who has been involved in the delicate negotiations between GM and the UAW, said that the three-way discussions are in progress but declined to comment further on the progress of the talks.



In effort to upstage York's broadside GM also announced that it was cutting Manufacturer's Suggested Retail Prices on dozens of vehicles, which account for about 80 percent of its sales volume. Under the new pricing structure, prices on many GM vehicles have been lowered, some by as much as $2,500.



LaNeve, GM vice president of vehicle sales, service and marketing, said the cuts included every Chevrolet, Buick and GMC model, as well as most Pontiac cars. "This is a big step for us and arguably the biggest price repositioning in our history," said Mark LaNeve, GM vice president, North America Vehicle Sales, Service and Marketing. "This move is in line with our customers' desire for simple, compelling prices."

[vador99]

York: GM Should Drop Saab, HUMMER




York: GM Should Drop Saab, HUMMER
Company has 1000 days of cash left, Kerkorian’s wingman says.
by Joseph Szczesny (2006-01-10)



The prescription for fixing General Motors is fairly straightforward but requires some tough action including the elimination of unneeded brands such as Saab and HUMMER, slashing the dividend and reducing the compensation of the board of directors and senior executives, says Jerry York.



York, an advisor to Kirk Kerkorian's Tracinda Corp., told the Society of Automotive Analysts that GM needs to recognize that "time is of the essence" and GM's management needs to create and galvanize change. Otherwise the company is on course to burn through its cash at a rate of $24 million per day, which means it will use up the balance of its cash reserves of $30 billion in about 1,000 days.



Bold and decisive action is needed to demonstrate that GM's management understands the problems and is willing to tackle them head-on, said York, who laid out a program of tough love for the struggling corporate giant.



"Although there are some people in this town that aren't there yet, in my mind this situation calls for the company's going into a crisis mode, adopting a degree of urgency that recognizes if things don't quite break right, the unthinkable could happen," said York, a former Chrysler and IBM executive, who has been advising Kerkorian on the ins and outs of the car business for more than a decade.



York also urged GM to revive the concept of equality of sacrifice that was used successfully more than 25 years ago to help revive the Chrysler Corp., which avoided financial catastrophe with the help of a government bailout. "In 1980 when Chrysler went to the Federal Government and requested loan guarantees, the government basically said, "Before we're willing to help to help, all of Chrysler's constituencies are going to have to kick in," York said.



"There was a lot of gnashing of teeth to get it all done but at the end of the day it worked," added York, who also quoted approvingly recent remarks by UAW President Ron Gettelfinger on the need for shared sacrifice. York's remarks also were a subtle rebuke to his old colleague Robert "Steve" Miller, the chief executive officer at Delphi, who has demanded major concessions from Delphi's hourly workers, at the same time he submitted a plan for rewarding top managers after the bankruptcy.



GM's board of directors also should reduce the company's 50-cent per share dividend and trim their own compensation by 50 percent. GM also should move down the corporate pyramid and reduce the compensation of top executives as well, York said.



GM, in many respects is a sound company operationally and has made huge progress in quality and productivity, he said. However, it isn't clear that GM has gone through the kind of all-encompassing review of cost structure which took place during the 1990s at Chrysler and IBM, he said.



In addition, GM must do more to rationalize its sales and marketing efforts, added York, who said he believed that Mark LaNeve, GM vice president of vehicles sales, service and marketing had the toughest job in the company. "Why does GM still own Saab?" York said. "HUMMER - this product line is most profitable but is it core? GM indicates HUMMER generates a high rate of first time GM buyers. But that's not the question in my mind. The real question is, 'Do first-time HUMMER buyers go on to buy Cadillacs or GM Trucks?'"



"If that's the case, then I guess it might be the correct decision to keep HUMMER. But even then, I'm not sure, given GM's substantial brand complexity and need to assure adequate liquidity," York said.



Fritz Henderson, GM's new chief financial officer, told reporters after York's presentation that he agreed with a lot of what York said. "To be honest I am in crisis mode," but he said would not discuss possible pay cuts or a change in the dividend with the board. Henderson also said he did not believe GM had to drop the Saab or HUMMER brands.



Meanwhile, Gary Cowger, the GM executive responsible for company's worldwide manufacturing operations who has been involved in the delicate negotiations between GM and the UAW, said that the three-way discussions are in progress but declined to comment further on the progress of the talks.



In effort to upstage York's broadside GM also announced that it was cutting Manufacturer's Suggested Retail Prices on dozens of vehicles, which account for about 80 percent of its sales volume. Under the new pricing structure, prices on many GM vehicles have been lowered, some by as much as $2,500.



LaNeve, GM vice president of vehicle sales, service and marketing, said the cuts included every Chevrolet, Buick and GMC model, as well as most Pontiac cars. "This is a big step for us and arguably the biggest price repositioning in our history," said Mark LaNeve, GM vice president, North America Vehicle Sales, Service and Marketing. "This move is in line with our customers' desire for simple, compelling prices."

[Dewi2005]

I started to write a long response... Then I decided it was useless to do that... Anyway.

Hummer and Saab are both great vehicles... trim back on some of the other autos that have similar types... And definitely trim the compensation at the top.

[KenP]

Does GM still make Buicks?

[W1N]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">
Hummer and Saab are both great vehicles... trim back on some of the other autos that have similar types... And definitely trim the compensation at the top. </div></BLOCKQUOTE>

Who needs swedish origin vehicles. Look at the history of Saab aircrafts...

<span class="ev_code_RED">DROP SAAB NOW!!!</span>

[VTSTOMPER]

IMO it would make sence to quite making the same car/truck in different lines. IE: Chevy Tahoe/GMC Yukon. It is the same truck...some small things are diffent...but that's about it.

Dumping SAAB might not be such a poor idea -

[Ipedog]

I used to own a SAAB. In fact we have had three of them. And because of that we had a very good relationship with the dealer service dept. We were there ALL the time. I am very happy that we kicked the SAAB habit and moved on.

GM might want to do the same.

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by KenP:
Does GM still make Buicks?


</div></BLOCKQUOTE>

Buick is supposed to be GM's Lexus...

[Klaus]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by KenP:
Does GM still make Buicks?
</div></BLOCKQUOTE>

Think Florida.

No one is driving... It's a ghost ship! No, I see knuckles!

[usetosellhummer]

Buick is sad, I never made a dime selling one and that should go the way of Olds. GM is very to heavy. Hte stats probally show a huge employee to car ratio. They have so much waste is would make your head spin. trim at the top and support the only tow things that sell cars.
1. exciting products 2. sales people

[HummerNewbie]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Klaus:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by KenP:
Does GM still make Buicks?
</div></BLOCKQUOTE>

Think Florida.

No one is driving... It's a ghost ship! No, I see knuckles! </div></BLOCKQUOTE>

Unfortunately you are correct and the next 3 or 4 months are the worst time of year

Saturday night I was driving back to Orlando from Sarasota doing about 80 when all of the sudden right in front of me in the left lane is a Buick doing between 35 and 40 in a 70 mile per hour zone. Thank god for ABS

All I could see in the car was the very top of a white haired head barely visible over the headrest

[ShaggyX]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by VTSTOMPER:
IMO it would make sence to quite making the same car/truck in different lines. IE: Chevy Tahoe/GMC Yukon/H2. It is the same truck...some small things are diffent...but that's about it.

</div></BLOCKQUOTE>Fixed.

[Boss Hoss]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by HummerNewbie:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Klaus:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by KenP:
Does GM still make Buicks?
</div></BLOCKQUOTE>

Think Florida.

No one is driving... It's a ghost ship! No, I see knuckles! </div></BLOCKQUOTE>

Unfortunately you are correct and the next 3 or 4 months are the worst time of year

Saturday night I was driving back to Orlando from Sarasota doing about 80 when all of the sudden right in front of me in the left lane is a Buick doing between 35 and 40 in a 70 mile per hour zone. Thank god for ABS

All I could see in the car was the very top of a white haired head barely visible over the headrest </div></BLOCKQUOTE>

I feel your frustration...we are loaded with snowbirds as well....the worst ones have minivans though.

[HummerNewbie]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Boss Hoss:
I feel your frustration...we are loaded with snowbirds as well....the worst ones have minivans though. </div></BLOCKQUOTE>

Around here the bad ones in minivans are the tourists who just don't know where they are going. Lucky for me I live (on purpose) on the opposite side of as the big Disney rat and can avoid most of them.

[PARAGON]

York flat doesn't like Hummer because of the image. GM is not going to dump the fastest growing brand in the US market just because someone without specific details throws it out there. If Kerkorian and York would have full control, GM would produce the cheapest econoboxes it could.

Also, he is speaking publicly and from an investors standpoint, so you really have to read between the lines. It sounds as though though Kerkorian is gearing up for a leadership change or something at GM and is laying the groundwork, IMO.

[PARAGON]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">TAKING ACTION. So, will GM take York's and Kerkorian's advice? It's doubtful that it will close down Saab anytime soon. And you can forget about Hummer being sold: GM says the brand is profitable and is bringing in buyers who previously didn't shop its other brands.

Since the UAW has already made concessions on job levels and health-care benefits, getting more would take some wrestling. Wagoner may not be able to get more from the union until its current labor pact expires in 2007.

Wagoner told BusinessWeek that GM already made significant cuts, but he didn't rule out the possibility that in a few years more could be necessary. He did say that his current plan -- including the job cuts, health-care concessions, and savings from purchasing -- will take out $6 billion in costs. But he added during an interview, "Will we need more? I don't know."

Neither do York and Kerkorian, but Wagoner can be certain that both will be riding hard on his management team. And if GM won't take action, they will. </div></BLOCKQUOTE>

[PARAGON]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">If York and Kerkorian don't think management is doing enough to turn the auto maker around, they have until Feb. 6 to file proxy proposals that would be voted on at the shareholders' meeting in June. They could file a shareholders' resolution, asking the board to explore the suggestions. Or Kerkorian could get really feisty and nominate his own slate of board members on a proxy ballot to wield more influence.

"[Kerkorian] has identified his intentions and used the pulpit to suggest them," says Maryann Keller, a longtime auto-industry watcher and consultant. "If management doesn't want to do that, he could stage a proxy fight."
</div></BLOCKQUOTE>

[Andy C]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Klaus:
<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by KenP:
Does GM still make Buicks?
</div></BLOCKQUOTE>

Think Florida.

No one is driving... It's a ghost ship! No, I see knuckles! </div></BLOCKQUOTE>

Gawd how right you are - landyachts driven by coffin dodgers are everywhere I turn.

[Adam in CO]

Funny. We only own Hummer and Saab.

[Aubs]

Of course, selling almost 6,000 H3's last month means it's a weak brand... For the sake of humanity, just look where Jeep is going! Soon Hummer will have a substansially larger window of opportunity with things like the Compass on the way.

It would be nice if people could just let Hummer alone finally. It's getting old the whole "I, obviously superior car magazine writer, the mainstream media and hippies everywhere, hate Hummer."

To boot, some crap on AOL was touting that, "Everyone is down on Hummer, so we expect it to be one of the brands that loses in 2006, along with Brittney Spears."