G.M.’s Electric Lemon

LAS VEGAS - JANUARY 08: A Chevrolet Volt electric hybrid vehicle is displayed at the 2010 International Consumer Electronics Show at the Las Vegas Convention Center January 8, 2010 in Las Vegas, Nevada. CES, the world's largest annual consumer technology tradeshow, runs through January 10 and is expected to feature 2,500 exhibitors showing off their latest products and services to about 110,000 attendees. (Photo by Ethan Miller/Getty Images)

There has been a lot of fanfare surrounding the GM/Chevrolet/Chevy Volt recently and I must say the press has mostly been pretty darn good. I’ve been sitting back trying to learn as much as possible about the Volt while keeping an open mind. Then the NY Times has an opinion piece that doesn’t read to well for the new GM product. Matter of fact the piece pretty much rips the new car for the lackluster styling compared to the 2007 concept we were shown and the heavy price tag of $41,000! Must say that many valid points were made here and one has to wonder how well (profit wise and branding) this car will turn out to be for the New GM? If the price scares away customers and the competition gets stronger (ie..,Nissan Leaf) the Volt could turn into a blown circuit for The General.

From the New York Times:

GENERAL MOTORS introduced America to the Chevrolet Volt at the 2007 Detroit Auto Show as a low-slung concept car that would someday be the future of motorized transportation. It would go 40 miles on battery power alone, promised G.M., after which it would create its own electricity with a gas engine. Three and a half years — and one government-assisted bankruptcy later — G.M. is bringing a Volt to market that makes good on those two promises. The problem is, well, everything else.

For starters, G.M.’s vision turned into a car that costs $41,000 before relevant tax breaks … but after billions of dollars of government loans and grants for the Volt’s development and production. And instead of the sleek coupe of 2007, it looks suspiciously similar to a Toyota Prius. It also requires premium gasoline, seats only four people (the battery runs down the center of the car, preventing a rear bench) and has less head and leg room than the $17,000 Chevrolet Cruze, which is more or less the non-electric version of the Volt.

Read the full article here.

  

The “new GM” is here

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The new General Motors Company has emerged from bankruptcy, and CEO Fritz Henderson is making plenty of changes.

Fritz Henderson’s remarks this morning on General Motors’ speedy exit from Chapter 11 bankruptcy were a pretty sweeping condemnation of the old GM’s culture and structure.

His decision to sweep away entire layers of regional management, and eliminate the entire group running the North American business and taking charge himself, suggest there was a lot of redundancy.

Of course, the fact that GM is selling its Opel operations in Europe and will only retain a minority stake makes a coherent global structure more difficult. But Mr Henderson is making the best of a bad job by giving Nick Reilly the job of running international operations from Shanghai.

The theme of reducing the amount of time spent talking and prevaricating in meetings is common to GM and Ford, where Alan Mulally has made much of his effort to speed up decision-making.

Henderson also announced a new partnership with eBay to sell cars by auction online. Nobody seems to know precisely how this will work, but the symbolism is clear – GM will be innovative in the future with respect to all aspects of the car business.

Bob Lutz has also decided to stay on and postponed his retirement.

In addition to hailing the closure of the deal, chief executive Fritz Henderson outlined several changes to GM’s management, including the “un-retirement” of vice chairman Bob Lutz to oversee most creative work at the company, including global design, advertising and communications.

Lutz is a great car guy, so this is a good thing, but I wonder about putting him in charge of marketing. GM’s marketing in the past has been horrible. They wasted huge dollars on old-school sponsorships, and the have not been a leader online. GM has stated that it is more committed to online advertising, but it remains to be seen how much an old-school guy like Lutz understands new media.

  

Judge clears the way for GM to emerge from bankruptcy

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They did it. Most of the experts said the government could reorganize GM through bankruptcy in such a short time, but now a judge has cleared the way and the “new GM’ will emerge as a new company.

The path is now clear for General Motors to leave bankruptcy protection in record time as a leaner company that is better equipped to compete in a brutal global auto market.

On Thursday, a judge’s order allowing GM to sell most of its assets to a new company went into effect, despite a last-minute appeal by plaintiffs in a product liability case.

GM spokeswoman Julie Gibson said U.S. Bankruptcy Judge Robert Gerber’s order became effective at 12 p.m. EDT. GM lawyers are working on paperwork to close the sale as quickly as possible, after which GM would leave bankruptcy protection.

GM CEO Fritz Henderson will hold a news conference in Detroit Friday morning to explain executive cuts, management changes and the company’s plan to make money by emphasizing quality and fuel economy. He will be joined by Edward Whitacre Jr., who will lead the board of GM.

Once the world’s largest and most powerful automaker, the “new GM” will become government-owned, but leaner and greener, cleansed of debts and burdensome contracts that nearly dragged it into liquidation. But the new company faces tough international competition and the worst auto sales market in more than 25 years.

John Pottow, a University of Michigan Law School professor who specializes in bankruptcy, said opponents of the sale had little legal recourse to block it because their issues were shot down by higher courts in Chrysler’s bankruptcy case.

“It’s done,” Pottow said. “I knew they were dead as soon as the Chrysler case was decided.”

He expects GM to close the deal and emerge from bankruptcy on Thursday in 39 days, a record for a company its size, he said. GM spokesman Tom Wilkinson said he could not give a time frame for when the sale will close.

The “old GM” will wind down all the assets that won’t be going over to the new company. It will be interesting to see what happens to all the old GM brands.

  

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