Smoke Screen: The New GM

General Motors slithers out of Chapter 11 and dumps billions in debt for tax payers to pick up. With big-G running the show via 60% controlling interest, the new and so-called improved GM will be focusing in on a vehicle line that includes: Cadillac, Chevrolet, Buick, and GMC. Gone by way of the scrap heap are: Saturn, Saab, Hummer, and Pontiac.

In an interview with PBS.org, CEO Fritz Henderson states that new efforts will be dedicated to customers, cars, and paying back tax-payers. Simply put, GM plans on making a profit by making a better vehicle. Now there’s a business concept!

However, according to General Motor’s Vice Chairman, Bob Lutz, in an interview with “Take Away,”, “Our problem was financial and market collapse, it wasn’t that we were building bad vehicles that the public wasn’t buying.” Right off the bat we see contradictions in the new management, but we’ll get to Lutz momentarily.

Not that Fritz is necessarily an expert in such matters, with a prolonged background in finance and a Harvard education; he’s not spent a lot of time under the hood bending wrenches. This not withstanding, if GM has just now determined that a business model built around quality is appropriate, just what in the hell was the GM brain trust doing in the past? Is this what 50 billion dollars of taxpayer’s money buys—not to mention Henderson’s 1,719,667.00 yearly compensation?

For starters, the new & improved streamlined GM will oversee a loss of nearly 30,000 American jobs. The focus according to Henderson is on “…delivering great cars; focus on the consumer; and getting our culture right.” Just how the “culture” plays a part is anyone’s guess. He further outlines three operating indicators (tied into cost structure) that “suggest” profitability:

*Fully competitive (One would speculate that this is a must?)

*Reduced fixed costs.

*Level of indebtedness eliminated (you’re welcome).

He further outlines “Great” new vehicles such as the Chevy Camaro, Chevy Equinox, and the Cadillac SRX. Fantastic! The new regime is also taking a hard line on leadership that includes:

*Focusing on customers (Thanks Capt. Obvious).

*Touching customers (err..sexual harassment anyone?)

*Getting out in the market (again, rather critical).

*Thinking about things externally (Business & proctology should always be separate).

*Getting out of the office (Lunch meetings are also important).

*Visiting Dealerships (those not boarded up) to include:

-Suppliers

-Customers

Now, here’s the rub. Bobby Lutz, Vice Chairman of General Motors, stated in an interview with “The Takeaway,” referring to the new GM, that “…the American government will take a hands-off approach,” and that “…the government is not directly involved.” Odd that he should state this considering the obvious facts that the government now owns 60+% of GM, and has instituted well documented management changes. In addition, according to GM’s very own Fritz Henderson (CEO) the government set the following agenda:

*A viable company (well yea!)

*Go deeper.

*Go faster in the restructuring plan.

*Appointment of new board members.

However, Henderson states, the government, “…did not tell us exactly what they wanted us to do. “…That’s what we’re doing.”

Hu?

According to Business Week, Bobby, was scheduled to retire from GM at the end of 2009, citing regulatory forces in Washington that force him to design what federal regulators want, rather than what consumers want. Lutz, whose full compensation in 2008 was 6.9 million, champions large vehicles and has to his credit: the Dodge Viper, Cadillac CTS, Buick Enclave, and the Chevrolet Malibu. So it’s not surprising that back in February, 2008, Lutz described global warming as, “…a total crock of shit,” and that additionally, “..hybrids don’t make sense.”

After the fall out of his comments, Lutz, has made it his business to go about giving lip service to non-petroleum vehicles, “We have to gradually transition the company to the electrification of the automobile, which with finite petroleum resources I think is inevitable.” However, in the next breath he boasts the success of the Camaro, and launches into a diatribe about why consumer vehicle purchases are not based on rationality. Translation: archaic idealisms die hard.

In the end all we see is more of the same. General Motors should have been able to die an earned death, yet we allowed our government to further contaminate the natural laws of industry and capitalism. The opportunity for a fresh breath of air in the polluted automotive industry was choked out by negligent interference from our elected officials. Shame on them. Shame on us.