GM Headed For Bankruptcy Again?

And Blind Brand hatred is even worse.

Note I did not defend he "brand", just commenting on a particular technology and its potential. I'm not in a position really say if GM will survive, as I don't follow the overall market well enough to make an educated assessment, and uneducated assessments, which seem to be all that is being offered in this thread, are worth less than nothing.

The volt is a new technology, just like the early hybrids, low volume is to be expected. The market is slow to adopt new technology, especially from a company that had troubled issues in the past. But your statement they have no hybrid technology was, quite simply, wrong. Only time well tell if GM has the management and business ability to turn that into a major segment, like Toyota did with the Prius line. Profitability is far more complex that just what tech you have and how many you can build. The new management is still making some serious mistakes, but so are all the other companies so its hard to know who will grow and who will shrink. All hybrids are only 3% of total sales, so the real question for profitability is nto really that related to the hybrid market. Hybrids and EVs are longer term investments for most companies.


Its a free country and you are welcome to have your own definitions of any word you choose. However, that does not make the correct. Hybrids use two sources of power, and the even the lowly eAssists meets that definition. Factually GM offers multiple hybrids and is the #2 overall seller of hybrids, with the Volt as their #1 hybrid. At end of july, Volt already sold over 10,666 in the US, more than all Ford + Lincoln Hybrids combined.

Yes a new fusion and C-Max should help Ford in this area, but they are stll playing catchup. And while the Volt is the most technology advanced hybrid in the stable, GM has already announced cheaper models coming down the pike such as the 2014 Cruze hybrid.

 

The thread was about GM going bankrupt again because it's product line lacks any hybrid, EV component.

The Volt is a limited production product made to meet Federal requirements. It is 0.00086% of GM's business. It is not really a product line for GM. It has been out for years and no part of the technology has been incorporated in GM's product line. If there was a hybrid Malibu to compete with the Camry or Fusion. A hybrid Cruze to compete with C-MAX or Prius. GM might have a chance at survival but that is not the case.

For those reasons, GM will continue to decline and will go bankrupt AGAIN for the same reasons it went bankrupt before.

I already won a bet with one of my MBA buds on GM going bankrupt. When we made the bet, he cited the Volt development (it wasn't out yet) as GM's breakout and why GM would make it.

 

GM has way more problems than just lack of a hybrid production line. They include poor management, an overpowerful UAW, lack of future vision and an inability to even stay within 2-3 years of their competitors in technology. Management seems unwilling or unable to make the tough decisions that would enable them to compete. Their quality has increased but they still lag in technology.

Case in point is the new 2014 Impala that will get 35 mpg hwy (woooooohhhhhhh). The problem is the Hyundai Sonata has been doing that since late 2010. IMO that puts GM 3+yrs behind. The Sonata does this without "e-assist" but the Impala needs e-assist to accomplish it. The "2014 Impala" is really just a repackaged Buick Lacrosse. That's their "new" car for 2014, a repackaged 2012 Lacrosse? Additionally they stuck with the current outdated design of the Impala too long (relegating it to the rental car fleet). I see GM's management as reactive vice proactive. The Volt is an example of this. I can just see the execs in the boardroom now "oh crap, the Prius is selling really well, and, it's reliable, what are we going to do?" Let's build the Volt and claim 235mpg's but only deliver 90. Let's not have real hybrids, let's have "e-assist" instead. Let's revive the Camaro, with 500+hp. I don't know about you but, I don't see a lot of demand for 500 hp.

 

As I already said, hyrbids have little to do with short term bankruptcy.. All hybrids combined are only 3% of the market, and for noone other than toyota is it more than 1% of their total business. Shorter term profitability is more about managements ability to manage/control costs, maintain overall product quality, marketing etc.

Long term the Volt is important because and related to longer term profitability because it could be (but need not be) a major new direction and new market segment. And it also impacts market perceptions.. The Volt probably has helped sell a lot of cruzes.. and other GM cars and has already helped them in many ways other than its direct sales.

 

The sonata is an excellent car. It is difficult to do a car redesign while in bankrupcy. Impala is a class bigger than a sonata, the car you are thinking about is the malibu that competes here and with the much better selling camry and fusion.
2014 Chevrolet Impala is a full-size improvement [w/video]

You may not have noticed but gm is run by a new management team. The volt is not there to compete against the prius, it is a future car a phev. It seems to do quite well in its halo role, pulling sales of the cruze. The corvette is a halo from an older age, higher powered comaros come from its r&d. Nothing wrong with 500 ponies, but cruze and volt and sonic are more of gm's future.

Lutz and his team that drove the company into bankrupcy are gone.

 

Actually they have lot do with GM's bankruptcy previous and probable.

The Volt has been out for years now. GM has pretty much abandoned the technology.

GM would need to have incorporated the technology and be competitive with Ford and Toyota NOW with hybrids to compete with Camry/Fusion, Prius/CMAX and with Toyota Highlander Hybrid. Ford made a terrible mistake in abandoning the Escape Hybrid. The could have come out with a 40 mpg AWD drive Escape Hybrid. I'd be driving one instead of the Prius.

 

I know that is technically correct but, the Sonata's interior dimensions qualify it as a "large" sedan and that's the same class as an Impala.

I agree, there is nothing wrong w/ 500 hp but, how much demand is there for that? It seems to me if I was running the company, I would try to narrow the tech gap b4 I invested precious R&D money in a low demand car like the Camaro. We'll see if this team does any better but, I see more of the same from them so far. If they really want to fix GM, they might want to start w/ a proactive approach and take some risks on designing a high mpg sedan that folks can afford. Incidentally, I'm unimpressed w/ the Cruze, Volt and Sonic as well but that may just be my opinion.

 

The Impala is the size up from the Malibu. It's competitors are the Avalon, Azera, and Taurus. Not the Sonata.
Of the currently available numbers on fueleconomy.gov (no eAssist or Avalon hybrid), the Taurus w/ Ecobosst is the one to beat with 26mpg combined. The Impala is 22mpg and the others 23mpg.

Now, now. Just because Toyota doesn't have some sporty offering is no reason to go all sour grapes.

The Camaro isn't mainstream vehicle. The large optional engine is even less so. But there is a market for it. Ford's success with the new Mustang proved that, and Chavy and Dodge decided to cash in on that market. Even Toyota teamed up with Subaru to bring a sportier Scion to market.

The Camaro was on it's way to market before the bankruptcy.
Much of the improvements in engine power output can be shifted to efficiency. Ford's Ecoboost program started out as performance enhancement.

 

Just because some magazine article says those are the competitors doesn't mean they are the authority. Trust me, the Impala is competing with the Sonata whether GM or Motor Trend want to admit it or not.

Great, so the Taurus is going good, Ford does seem to get it. This isn't about Ford or Sonata, this is about GM. I merely gave the Sonata as an example. I could give numerous examples besides that. How about we compare the Malibu to its competitors? Fail!!!!

I agree the Camaro isn't mainstream so, why invest so much R&D on a low demand vehicle? What do they gain? They gain people like me scratching their heads wondering why GM looks to the past for future success.

You mention the Scion (FR-S I assume), Lets compare that and the Camaro for a practical vehicle
Compare Chevrolet Camaro 2013 vs. Scion FR-S 2013 - Cars.com
It is my belief that Camaro owners will get mighty sick of going to the pump. Yes there's a market but its so limited that it doesn't make sense for a struggling company. Ford is not struggling. They get it. Let them build the Mustang however they want. Taxpayers don't own half of their company.

There are no sour grapes here, just lack of understanding I guess.

 

July 2012 YTD - Top 261 Best-Selling Vehicles In America - Every Vehicle Ranked - GOOD CAR BAD CAR
You may want to check the sales stats. The car mags like the sonata better than the malibu, but more are buying the malibu. The impala is in another class. Midsize cars are growing and large cars sales are shrinking, but impala + malibu if all you are looking at is sales, make it a different comparo. Malibu redesign suffered from bankrupcy, but is selling well for its rushed appearance. It is a number of steps behind camry/accord/fusion. We will see how the fusion redesign happens soon as numbers shift to 2013 models.

Again the engine was developed for the sports car halo, the corvette. GM seems to be shifting to the green halo, volt. I don't think they should drop the 'vette, too many fans. It doesn't cost much to drop some of that tech in the camaro. Ford doesn't have a sports car, so you may question that they have a race track ready version of the mustang, but that pulls along the v6. Mustang is the only car that got 10 best in both car and driver and consumer reports. It makes it money on the f150, focus, and fusion though.

The camaro competes with the mustang, and the mustang is winning, its the muscle car segment. Its a throw back segment with push rod v8s and inexpensive suspension. Lots of power/$, old school, and better than they ever were.

The Scion FR-S is a strange one. It appears to compete in the pocket rocket segment. Here handling is more important that raw hp, but hp is there. The king is the vw gti, with fans of more grunt going for the mazdaspeed 3. Ford's new entry starts selling in September, its the focus st. scion/subaru are entering the competition without a turbo, and also without a higher volume lower power version. I don't think the ford's fuel economy numbers are out but it should handily beat the scion. GM doesn't have a sport version of the cruze to be its pocket rocket. IMHO vw, mazda, and ford are going to shoot this one out, leaving the competition far behind. Its good to see toyota finally getting back in the game though. It should help their other cars.

Hopefully that will give you a little better understanding of car segments.

Bailout, can only be justified in terms of jobs, the moral hazzard is money was given to a failed company to keep it afloat. I would much rather though have gm's team manage it, than the government. I doubt if we had a presidential appointed board and management team it would do any better. The government should have taken its lumps and exited its equity position. The bailout should have included warrants for the government to be made whole if the company gets sucessful.

 

By that logic, the Avalon is competing with the Camry regardless of what Toyota says. Many sedan buyers probably do take a look at the larger sibling while at the dealer. The higher price tag and lower fuel economy push most back to the smaller car.

Compared to mid-size sedan sales, large sedans aren't main stream either. So why should GM even build the Impala? Because there are enough people that want one to justify the cost of making it. If Chevy didn't have an offering for those people, they would just go to Ford, Hyundai, or Toyota. As a part owner in GM, I don't want them to simply abandon a still vialable market to competitors.

So what if the new Impala is based on Buick. It isn't as grievous as the brand engineering of the past when the difference might literal be a different emblem. The new Avalon is based on the Lexus ES, which in turn is based on a stretched Camry platform. It's a practical way of saving R&D dollars.

Speaking of which, how much R&D has been spent on the Camaro? The bulk of its development occurred before the bail out, thus pre-tax payer dime. With the success of the Mustang, why toss out the investment on a model of such an iconic name? Sales have been increasing from 2009 to 2011(80+ thousand a year), so investing in a refresh makes sense. Letting a model languish can be worse than just cancelling it.

The 500+ hp motor that seems to be an issue here is part of that refresh in the new ZL1 trim. It isn't new. It first appeared in the 2009 Cadillac CTS-V. It is a supercharged variant of a 6.2L that appeared in the 2008 Corvette and special edition Holdens. Which in turn is a bored out 6.0L block from 2005. Which is part of a large family of GM engines. Worried about government money going into frivolous, high power engines. Didn't happen here. The bulk of any R&D money putting this monster into the Camaro likely went to bulking the rest of the drive train. Other enhancements for the ZL1 most likely came from other products already in production.

The other thing for the 2012 is that the V6 gained a little power while losing 20 pounds. It to sees use in a range of models, including the the Impala.

 

Well, I've complained enough. I guess these are just my opinions/observations. Good info from all. Good debate. I know I didn't change any opinions but, mine didn't change either.

 

Really, I;ve not seen any data supporting that. Do you have any citations?
So far you've added no data and little insight.

Abandoned? What are you smoking?
GM improved volt range/efficency for the 2013, and are working on more significant improvements - new ICE engine is comming (though not formally announced what it will be). They announced the ELR, and the Cruze hybrid, both of which are leveraging the Volt technology. (They announced Sparc but I see that as mostly compliance for now).
The fusion and CMAX are nice its not clear they how much they would really take away from Camera/prius.. we'll have to see if they are really compitative. I do agree a 40mpg AWD CUV would sell pretty well, but none of the company have that even announced. (Subrau has one at 36 highway, and in my Mitsu is the closest with the outlander PHEV).

 

I don't know about it selling well. It would likely be quite expensive. For about the same price you likely could build a phev 4wd cuv. If you don't have a big battery you likely need a much bigger ice, and with the tax credit adding a plug makes it less expensive to customers. That 2L ice needs a big buffer if you are powering the back and front wheels efficiently. As you said here is mitsubishi's first attempt at that animal
2014 Mitsubishi Outlander Plug-in Hybrid for U.S.: 2012 Paris Auto Show

If GM did it, I'm sure the haters would be hating on it already. Ford probably could produce the beast most cheaply by modifying the c-max energi and hybrid, but the energi isn't even for sale yet. I'm guessing ford did their research before designing the c-max to find that price point was not a great segment. I don't think the escape designers, which competes well on price wanted to find room for that big battery. Toyota/Lexus have their rxh and hihy but numbers can't get close to 40mpg on a mid-sized awd suv. The Lexus RXh seems to be the SUV hybrid segment leader, even if its mpg is much lower than 40.

Escape ecoboost awd gets 22/30/25 which is quite good for the segment, but I can't see how it would get to 40 but lets' say it could. Would that oursell a less expensive c-max at 47mpg? Who knows if the c-max energi and/or outlander phev sell well, we may see a 4wd version in a refresh. I doubt that will happen though.

 

It's a long shot, but the best bet for a 40mpg AWD CUV would probably be a B-max hybrid. It's a bigger C-max on the Fusion platform, and AWD is already an option on the ICE Fusion. I think we'll see AWD on a Fusion hybird before we see any B-max here though.

 

We do know that the escape awd hybrid did not sell all that well. It did poorly enough for ford to try a new strategy with the c-max. Therefore it is doubtful that gm not having a 4wd hybrid had any bearing on its bankrupcy. Still, I'll continue in the vein of what a sucessfull 40+mpg cuv might look like.

I'll agree with you on the unlikeliness of a b-max american hybrid. The problem with using an existing awd system, is it does not mate easily to a psd like toyota and ford are using, the old escape took almost a 10% efficiency hit. A better solution is to add a rear motor/inverter/controler as in the lexus rxh, which doesn't hurt mileage. This leaves the front psd would stay the same, so it is more modular. One problem with a small battery and such a system is that not much power can go to the rear wheels at low speed. Mitsubishi and volvo are using a bigger battery. A c-max or fusion energi could save power in a awd mode, and always have 68kw(90hp) on hand. I would guess such an option would have 238 hp, and might be set up to be able to tow like the RXh. The inverter/motor/controller could be the same on all the fords, but the rear axle would be different. A c-max energi awd might be $32K after tax credits, a lower 185hp hybrid might be $2K cheaper so not as good of a value proposition. I do not know if there is enough of a market to do the nre. Does anyone know the split of 4wd/fwd on the lexus rx hybrid?

 

Regardless of what your reply is on the Volt, I have said it before and I will say it again:

The Volt will Not save GM!

Concerning loss on every Volt, Ask the man directly: Akerman who predicted 35,000 to 40,000 as of June 2012, so far: 10,666 so far this year. He cant not be too happy with this.Oh, my source: The Business Spectator.
On the issue of Volts being sold at a loss, why would it be any difference than any other hybrid during the first early years of production?

A suggestion, do your homework and stop asking the silly questions above. Also why are you calling the Volt a hybrid. GM, itself can't decide what the Volt is, hence the confusion with the majority of the buying public.

DBCassidy

 

Well, as far as I am aware, Ackerman has not publicly said they loose money on every volt. That he predicted larger sales is neither new nor relevant. Almost all CEOs make big statements about new product. I just searched on the business spectator and could not find any comment there about the volt loosing money.

I'm asking "silly questions", but I have done my homework and am am trying to get people to prove their point, or stop the BS or making incorrect statements. With respect to the Volt lossing money, or other hybrids looking money, that can be mostly a question of accounting. Its possible to make a small profit per car, but if you include the R&D costs, it may be that the line, overall, has still lost money. But to say they loose money on every car is a much stronger statement, for which I've not seen any documented support.

I'm calling the volt a hybrid because it is. The Volt is an EREV is a PHEV is a HEV is Hybrid Vehicle is a Vehicle.

GM has been pretty clear, the volt is an EREV. Where are you seeing GM being unclear on that?

 

The public statements were gm was spending about $40K per car at the start of production. Since then with the higher volumes, and the movement of the engine manufacturing to the US, productions costs should have dropped. The biggest cost reductions would be in the battery. This would lead an analyst to think that gm has been about breaking even per car on production costs. There may now be a profit per car, but it is not high. If they sell 20,000 this year versus 45,000 this year it would not have much affect the bottom line, only the top line

The fixed cost of the NRE, launch, congressional hearings, etc are already spent. The volt has not paid these costs, nor is it likely to pay a big chunk of them in the first generation. These costs are reportedly around $700M, most of it spent before the bankruptcy.