GM just doesn't get it

courtesy of autobragblog.com

The bailout package for the automotive industry that has been in the works for the past couple months, and discussed at length today in the Senate, indicates that the automotive landscape in the US is at a critical juncture. The future of transporation is growling  viciously at the front doors of the Big Three domestic automakers, and it is growing more and more apparent that they don't have the meat to feed it.

Ford is in a precarious situation, and has asked for a $9 billion credit line, but says it doesn't need immediate liquid assets. General Motors and Chrysler however, are in not a precarious, but a dire, situation. Without cash... well... right now, they will go bankrupt. Both GM and Chrysler have enough cash resources to last no more than a few weeks.

After the horrendous PR blunder of showing up in private jets to ask for money last week, all CEOs of the Big Three have agreed to drastic pay cuts, the sale of said private jets, and massive company restructuring to convey an aura of humility, and show responsibility for the American taxpayers' money for which they are asking.

As they say, hindsight is 20/20, and pointing fingers and making accusations about why the American automakers are in this mess is pointless. The best plan of attack now is to look forward, at what the automakers plan to do from this point on.

And getting down to brass tax... General Motors is headed straight for disaster.

Rick Wagoner, the CEO of GM, is the last of the Big Three CEOs to agree to the $1 salary for next year that Ford CEO Alan Mulally has agreed to. Neither of them will make money until their companies begin making money again. Chrysler's CEO Robert Nardelli has agreed to the same, and just this evening in an interview with BBC World News, stated that if the future of Chrysler depends on a complete replacement of all executive management, including himself, then he is willing to accept that.

Although Wagoner eventually agreed to the pay cut, the idea that he merely jumped on the bandwagon to save face can't help but come to mind.

Irrelevant as the moral standing of Wagoner may be, the issue with GM is far deeper than that.

Last week, GM made an announcement that it wants to scale back on the number of automobile brands it produces. It wants to focus its attention on Chevrolet, Buick, Cadillac, and GMC, while it will likely sell or even terminate Saab, Saturn, and Pontiac.

Okay. It wants to keep Chevrolet. No problem. Chevrolet is GM's bread-and-butter brand, and is practically synonymous with GM. Cadillac is a strong marque, with unique vehicles and a loyal following. Buick, while posting rather lackluster figures in the US, is a runaway smash hit in China, where alone it outsells other manufacturers worldwide. So far, so good.

Saab was a unique and forward-thinking company when GM bought it in 1991, and it has gone straight downhill from there. Now only a collection of engines and platforms virtually identical to offerings in other GM brands, marketed under the pretense of 'Swedish engineering' and 'jet-fighter heritage,' GM has ruined Saab enough that it might as well just pull the plug. Pontiac, long standing as GM's 'performance' line, only has two models to itself; all its others are shared with other GM brands. Since performance isn't a high priority for American consumers in these tough times, Pontiac will have to be honorably discharged.

Up to this point, it looks like GM is showing some judgment, and taking responsibility for its mistakes. This means some sacrifices, yes, but if they're necessary for GM's survival, then they will be wise decisions.

However, the praise ends there. Their choice of the fates of two particular brands show that they either are completely out of touch with the needs of the American consumer, or they simply wish to take no part in the future of the automobile.

GM wants to get rid of Saturn. Saturn has the most unique, fresh, young and hip automobiles in all of GM-land. The Aura was named North American Car of the Year in 2007. The Astra is (finally!) a bonafide European GM model in the US. The Sky is a fun, sporty and yet liveable convertible that is fierce competition for the likes of the Mazda Miata and Honda S2000. GM claims that Saturn hasn't seen the success of its early-90s debut in years. Well, maybe because they aren't marketing it right. If GM marketed Saturn the way Toyota markets Scion, it would have plenty of the young buyers toward which Saturns are aimed.

But the most conclusive evidence of GM's nonchalance about its predicament is this...

... it wants to keep GMC.

GMC is without question the most pointless of all GM's brands. Every single vehicle in GMC's lineup is nothing more than a rebadge of other GM models. It has no vehicles unique to its brand. In fact, GM could nix GMC and the average American buyer wouldn't even notice. On top of it all, GMC is a truck brand, solely and exclusively. Right now, when the fate of trucks has never been more grim, the last thing GM needs is a marque dedicated only to trucks.

If GM is actually going to choose GMC over Saturn, and continue doing things the old-fashioned way like it apparently wants to, then Louisiana Senator David Vitter's prediction that GM will be back for more bailout money in the near future will likely become a reality.

We need GM to stay alive. The US's already outrageous unemployment statistic of over 4 million will nearly double if GM goes belly-up. That will be enough to cause a depression, if not an armed revolt.

Make no mistake... this is serious. We are literally staring the future of the American economy in the face.

But if GM is going to be this greedy and stubborn, then whatever catastrophic demise that befalls the American economy... will be on them.