I once asked a priest about confession. What was the point? I knew Catholics who'd sin, confess, sin, confess, wash, rinse, repeat. It's not a 'get out of hell free' card, he insisted. Confession means you fully acknowledge your sin, pledge to atone for the harm you've caused, and promise God that you've learned from your mistakes. Let's say you do all that and commit the same sin. What good's an unrealized promise? None, he said. I have refused absolution to repeat sinners because I didn't believe that they were ready, willing or able to abandon their sins. And there you have it: New GM's recipe for disaster. Let us turn to the first sentence of New GM's press release.
The new General Motors Company began operations today with a new corporate structure, a stronger balance sheet, and a renewed commitment to make the customer the center of everything the new GM does.
Leaving aside the fact that GM's opening proclamation makes no mention of its bankruptcy, or what led to its bankruptcy, how can New GM say that the company has a new corporate structure? Fritz Henderson was the CEO of Old GM. Fritz Henderson is the CEO of New GM. Mark LaNeve was Old GM's VP of sales and marketing for North America. Mark LaNeve is New GM's VP of sales and marketing for North America. And so on. In fact, Old GM's ex-Car Czar Bob Lutz has been reinstated as New GM Car Czar.
Yes, GM is now run by the federal government, under the watchful eye of a twenty-five member, politically-appointed organization called The Presidential Task Force on Automobiles. As much as Old GM's management needed a right royal arse kicking-which, as stated above, this isn't-I still can't see GM nationalization as something worth celebrating.
Stronger balance sheet? As Ronald Reagan used to say, there you go again. Sure, GM's balance sheet is relatively stronger (i.e. stronger than it was before the government assumed control to prevent the bankruptcy it couldn't avoid in any case). But that doesn't make GM's balance sheet strong per se.
New GM may only be carrying $11 billion worth of debt, but any realistic appraisal of its balance sheet would have to take into account its cash flow, current assets and, more to the point, its future prospects. The company's brands and future product plans are in complete disarray. With the exception of its pickup truck, its current products are hardly class-leading. Incentives are high and getting higher (i.e. margins are low and getting lower). The new products on the horizon are . . . on the horizon. Next big thing much? Yeah, how's that been working for you?
That bit about the renewed commitment to make the customer the center of everything the new [small n] GM does is also deeply worrying. When exactly was GM last committed to its customers? Before they allowed [now-bankrupt] Bill Heard Chevrolet to screw every single person that darkened the dealership's doors because the man moved mountains of metal?
What does the center of everything GM does mean, anyway? As far as promises go, you couldn't get more vague if you tried. That said, New GM's new press release attempts to cross some of those i's and dot a few T's.
Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers, said Fritz Henderson, president and CEO. We are deeply appreciative for the support we have received during this historic transformation, and we will work hard to repay this trust by building a successful new General Motors.
I love that: including me. Somewhere in the back of my mind, I hear Fritz singing Elton John's I'm Still standing. But the phraseology is a bit off-kilter. Get back to the business of yada yada yada? What were they doing before: hanging around waiting?
OK, that's a bit nit-picky. But if New GM's so new, why are we getting the same old song and dance from its old-I mean, previous and current, CEO?
One thing we have learned from the last 100 days is that GM can move quickly and decisively, said Henderson. Today, we take the intensity, decisiveness and speed of the past several months and transfer it from the triage of the bankruptcy process to the creation and operation of a new General Motors.
Here we are again: faster, deeper, harder, oh baby! Anyone remember Chrysler's contention that speed was the primary advantage of private equity ownership? That didn't turn out so well. Besides, does anyone really believe that a government-owned General Motors (with the aforementioned twenty-five member oversight team) will be faster than Ye Olde GM?
As I've said before-in response to this increasingly-tiresome, increasingly-meaningless meme-GM's problem is not speed. It's direction. GM still doesn't have a coherent plan for their brands or the models within their brands. Other than repaying our trust (I'll take cash, Bub), they don't know what they're supposed to do with themselves. Or do they?
Our goal is to build more of the cars, trucks, and crossovers that customers want, and to get them to market faster than ever before.
More, faster. See how that works? Or, in fact, doesn't? According to Fritz's previous pronouncements, GM's whittling itself down to only 39 nameplates.
The success of our recent launches and the exciting new vehicles and technologies we have in the pipeline are evidence of our ongoing commitment to excel at everything we do, said Henderson. Our goal is to make each and every General Motors car, truck and crossover the best-in-class.
Again, thirty-nine nameplates. All best-in-class? How realistic is that? But hey, Fritz feels me.
Henderson also announced initiatives to open more direct communications between customers and GM employees at every level. Beginning next week, we will launch a 'Tell Fritz' website where customers, or anyone else, can share ideas, concerns, and suggestions directly with senior management. I will personally review and respond to some of these communications every day.
Anyone else? Glasnost? Sounds good! But then, press releases always sound good. To someone. Usually, the people for whom it was written.