Friday, July 4, 2014

GM's Independence Day

General Motors is offering American drivers a liberating Fourth of July: 0 down, 0% interest for 72 months. That’s right: No money down; no interest on a six-year loan. Local dealers are also advertising: “No payments for three months.” Here’s the deal: 0 Down; 0% interest on a six-year loan; No payments for three months. Here’s the real deal: “0 Down, 0% interest on a six-year loan; No payments for three months; UNLIMITED RECALLS and a LIFETIME SUPPLY OF IGNITION SWITCHES” Ken Feinberg, the master large claims settler, announced Monday on behalf of General Motors a compensation plan for the victims of ignition switch mishaps. His announcement received little attention, except by trial lawyers. GM announced on Monday it’s 54th recall of the year, this time 8.4 million GM cars and trucks. GM has now recalled 28.9 million vehicles worldwide this year. 25.7 million of the recalled vehicles are in the United States. Buy a GM car and the odds are 1,000% you are buying a recall. GM’s 25.7 million recalled vehicles in the United States is approximately the total number of cars and trucks it has sold in the United States over the past decade. GM gave us the “GM Mark of Excellence” 45 years ago. GM’s new motto is “Another day, another recall.” It could also be “We recall ‘em quicker than we build ‘em.” Buick, Cadillac, Chevrolet, GMC, Oldsmobile, Pontiac, SAAB, Saturn – GM can recall any car it ever made. Oldsmobile, Pontiac, Saturn, SAAB. GM stopped making them years ago, but is still liable for them. Today, July 4, 2014 is Independence Day for GM. Mary Barra, GM’s new CEO, is cleaning house. GM is going to refocus on safety. The old GM did not die in bankruptcy. GM apparently, when part of “Government Motors, did not reveal the safety issues to the Government. Bankruptcy is the perfect opportunity to wipe the slate clean, the time to reveal all. GM missed that one. A new GM emerged out of the old GM in bankruptcy, but the new GM is just more of the old GM. The corporate structure changed, but not the corporate ethos. Cars, pickups, SUV’s, GM did not discriminate. They all get recalled. Top sellers, as well as slow selling models, get recalled. Mary Barra, as the new CEO, has the opportunity to create the new GM. She has no choice. GM still sells cars, but its market share has dropped from about 60% 5-6 decades ago to less than 20% today. GM, as well as Chrysler and Ford, built high priced, low quality cars. The Japanese and Germans, and now the Koreans, are outcompeting the Big Three in cost and quality. No auto company is perfect. Ford recalled 21 million cars and trucks in 1981. 1970-1979 cars and trucks could shift out of reverse. Toyota recalled 6.4 million vehicles in May, but it is overshadowed by GM. General Motors is undertaking the most comprehensive safety review in its history. The recall costs and settlements will cost GM, but thanks to bankruptcy the company has $30 billion in cash. This recall will cost GM $1.2 billion. GM must change. down, 0% no interest loans for 72 months. Jump on it if you think GM will finally get it right.0%

No comments: