I would like a five-passenger car that could carry five actual American passengers, not five anemic Asians. I am so tired of cramming my family into a compact car. If they would make a Buick with a huge backseat that didn't cost more than a minivan they'd have me in a heartbeat.

GM had 2004 sales of 193,517.0. GM also posted 2,805.0 in net income with a 1-year sales growth of 4.3%. Compare these numbers to Daimler with 192,433.0 of sales with net income of 3,340.0 last year. Ford posted sales of 171,652.0 with a 1-year sales increase of 4.5%. Toyota chimed in with sales of 163,637.0 and net income of 10,995.0. All numbers are in millions.

While GM's sales growth and net income are not industry leaders they are certainly not anything to scoff at. GM can certainly work to provide more value to shareholders, but I think they will be okay.

buick is big in china.

they'll dump pontiac.

I don't know about the sober part. I can't imagine anyone buying an Aztek while clean & sober...

Jason,

GM's situation is more dire than it appears on the surface. One thing that is looking more and more ominous on the balance books is the $5 billion annual bill GM pays for health insurance for its employees. The costs are zooming out of control.

Secondly, GM has a HUGE amount of debt. How much? As this chart on Yahoo Finace shows

http://finance.yahoo.com/q/ks?s=GM

GM has more than $300 BILLION in debt.

Let me say that again.

$300 BILLION in debt.

And there's talk GM will soon be relegated to "junk" debt status, making it hugely more expensive for GM to finance that debt.

Can someone tell me why an unimaginative, conservative blowhard like Bob Lutz continues to be CEO of GM?

Paul-

Your comments are well received.

I believe that I read somewhere that GM was attempting to address the health cost issues as soon as possible. Good luck with the unions on that one.

I wonder if GM is sitting on high inventory right now? That could explain some of the debt. Either way, your points are well taken. Even with the recent share price drop it still doesn't seem too attractive.

I wouldn't write them off either. It looks like GM has raised this year’s outlook, generally. If sales meet or exceed estimates and GM can pare down labor costs that big debt number could be manageable. GM has a significant market share and those sales are not going away tomorrow.

Despite my criticisms about GM, I still believe that having strong American companies is entirely critical and necessary to the American economy.

However, GM's problems go to the core. You have dozens of layers of entrenched management who, for the most part, fear change - especially the innovative kind (just take a look at Saturn, a hit division that GM gutted soon after launch because it feared its success). These managers are still living in the 1950s.

Yes, GM is trying to do something about its health care costs, but they let it balloon to $5 billion before the light went on.

Yes, much of that debt may be the result of high inventories, but that wouldn't be very reassuring because it would mean no one is buying GM cars these days, yet GM still cranks them out, only to offer margin-gutting $3600 average rebates to move the cars off the lots (presumably to the inebriated souls who buy end up buying cars like the Aztek).

And yes, GM has really, really thorny union problems. The unions definitely are a huge part of the problem, and they can't help themselves. Just look at GM's average time to build a car compared to Toyota (I believe it's more than twice as long). It takes a GM union plant months to turn a factory to produce a different model while it takes Toyota days. Heck, when the unions complained about the new Saturn models that GM finally decided to produce, Saturn was forced to give Vue production to a union plant and guess what? Average number of defects per Vue instantly DOUBLED.

So, to make GM relevant and healthy again, I believe it will take a few more spoonfuls of some really bitter medicine (without the sugar). Make that a couple. Necessity may be the mother of invention, but nothing short of impending doom will shake a monolithic bureacracy like GM to wake up from its myopia and self-delusion. I'm afraid GM will have to shrink much more before top-level management will take the kind of bold actions necessary to rekindle the fire of innovation in Detroit.

But here's hoping that day comes sooner, not later.

At least Chrysler seems to have recently found its mojo with the 300M (and that's a perfect story of how a talented, uncompromising young designer fought risk-averse execs to get the 300M out the door).

Save Buick, bring back the 3.8 liter turbo-powered Grand National. Gas sipping, road eating, Mustang-crushing power in basic black.

Gm's problems are manifold but I think they all stem from one basic area: design.
Right now, aside from light trucks/ SUVs, GMs most profitable and innovative product line is Cadillac. Imagine that.
I'm a Detroiter and I do a ton of work for GM, alot of it for their design group. I remember a couple years ago when they were going to re-introduce the GTO. I saw all the early stages of design for this car and it was really going to be an awesome thing. The design was really beautiful and unlike anything else. Then, lo and behold, the GTO hits the market and it is nothing like the concept designs, turns out it's just a repackaged Murano (Australian) which looks to my eye like a wimpy Grand Am. For a 'car guy', It's almost an insult.
GMs problem with passenger cars, Cadillac excluded, is they are brought to market almost as an afterthought. Look at their entry level cars like the Cavalier and the Sunfire. 20 year old designs and junk. I won't even rent one when I travel.

I drive a 1996 Buick Regal GS and it's one of the finest vehicles we've ever owned. My wife has lusted for a LeSabre for some years.

Well, guess what folks? Both the Regal and LeSabre are history. Buick is flushing their nameplate brands down the drain in lieu of something marketing likes, I guess.

Too bad. We usually buy ours used, so I suppose we can still do the LeSabre thing.

Jim

My father- who learned how to drive on HIS father's Model A Ford- never tires of stating that Detroit is about thirty years behind Japan when it comes to automotive aesthetics. Compare and contrast: The New Mustang (eegh) vs. a Toyota Solara Convertible (fresh and classic) or even a Hyundai Tiburon (AKA 'Ferrari Knockoff'). The old guy has a decent point: Detroit has become the Hell where bad sheet-metal goes when it dies.
Top that off with the price issue-- when I buy a $20,000 Japanese car I GET $20,000 worth of car, not $15,000 worth of car and $5000 worth of payments on a UAW retirement plan-- and GM's doom becomes more clear. Just like 'fat, dumb and ugly is no way to go through life'; overpriced, ugly and short on features is no way to sell a car.

The real crush is yet to hit, though: The only market segments where American cars are really competitive are pickup trucks, big SUV's, and full-size cars. What do y'all think is going to happen to sales on those 15 MPG beasties when gas hits $2.50/gallon?

Well under 40 anyway.

GM's problem is that they have to make cars, whether they sell them or not. Their union contracts have German-style job protection built in. Their only hope is to survive long enough for most of their employees die off, after which they can become profitable again.

DaveP - I can't argue with much of what you say, but I still go back to GM's Cadillac division. They are doing really good stuff, almost like they aren't even part of GM. So the Detroit makers can indeed do it when they need to.
JD Powers and Consumers also rate most American cars general reliability and build quality just about on par with the Japanese, and now well ahead of most Euro nameplates.

Hey, hey, hey. I love my Buick and will buy one again. It's a dumb little 98 Skylark and people always say, "yaa my grandma drives a buick". Then they ride in or drive mine and are amazed by the smooth ride and how well the v-6 takes on those Colorado mountain passes.............even Aerosmith likes Buick.

90s-era Skylarks are like miniature tanks - I used to own one. I've got a 2003 Sunfire now, so far it's good, but a big part of that is having a good dealership to work with, not something you can guarantee.

Lots of companies have health care cost problems. There's already been some noise from some companies about how wonderful national health care is. I.e., stick the taxpayer with the bill, not business. GM cars suck nowadays, just look at the Malibu. Now, my grandfather had a Malibu ('71, 350 big block), I drove that Malibu, this new thing is no Malibu.

I drove a '72 Malibu until I left Atlanta, three years ago. I couldn't bear to kill it in these upstate New York winters, where a 4x4 is the thing.

That thing they call a "Malibu" now is a disgusting insult.

BTW, while we're at it: I hope Dodge gets to eat their so-called "Charger" by the thousands.

I agree that the rebirth of all these fantastic models from the peak of American automobile design are insults.

From the "new" Mustang which is a really generic version of the prototype of the what the 40 year edition was supposed to look like....to the "new" Thunderbird which is the ugliest car I've seen on the road...to the Charger and the Impala and so on.

Even the newer Pontiacs are a disgusting failure. My father owns a '67 Grand Prix convertible (I think it's a '67) and it's awesome. Grand Prixs now are just ugly.

And as for Americans still holding tight with their trucks and SUVs, I am currently getting my very nice German built vehicle serviced and unfortunately was given a Ford Explorer to drive. While the outside is alright, the inside is cheap and crappy. I'd buy a Japanese or German SUV before I'd drive an American one.

inventories for cadillac's cars are at dangerous high levels, according to articles in the wall st. journal.

and quite frankly the lacrosse is a design failure, and the g6, while a much better looking car, is in a very competitive niche where much better cars dominate (mazda's lineup is getting favorable reviews in comparison to tepid reviews from pontiac).

at the end of the day, both brands face a huge problem in the brand themselves. both cars are neither associted with performance or quality or contain anything aspirational for the up-market car buyer, or even the mid-market buyer who might be moving up. now, they look at brands like mazda, vw, even audi before buick and pontiac.

just my .02

I swore I'd never buy another GM product over thirty years ago, and I have not. This was the time GM pressured Congress into setting up import restrictions against Japanese automakers, having stiffed the unions with "woe is me."

I could care less about the unions, but as soon as the import legislation was enacted, GM awarded its managers massive bonuses, then jacked up the price of cars.

Screw 'em.

We used to have a 1958 pontiac station wagon and wow did it ever have room a third seat in back for extra passengers and a speen control which was just a device that would buzz and flash a yellow light when you drove over a certan preset speed and o yes my parents also had a 1952 buick

DaveP,

[The only market segments where American cars are really competitive are pickup trucks, big SUV's, and full-size cars.]

For only so long. Toyota has mastered the light truck catagory for some time, and Honda is jumping in with their Ridgeline. It's only a matter of time before consumers realize that trucks don't have to break down every 20k miles and should run for 100k before any serious maintence.
Is there any doubt that the Japanese companies will figure out the heavy truck catagory? It's only a matter of time when the Japanese companies score big in every catagory.

Wass,
[JD Powers and Consumers also rate most American cars general reliability and build quality just about on par with the Japanese,]

Umm, no offense, but, Bullshit.
"As in past auto surveys done by Consumer Reports, the most reliable vehicles were built by Japanese manufacturers. Among the 32 models with the highest reliability rating in the new (2004) survey, 29 carry Japanese nameplates, with Toyota (16) and Honda (7) claiming the most."
http://news.carjunky.com/buying_tips/auto_news_13.shtml
Just being better than socialism-handicapped Euro companies doesn't mean you're good. Girly tough ain't enough.

Looks like the US companies are losing the SUV war too.
"Asian models monopolized the top ratings in the SUV segment, with the lowest ratings going to a mix of European and U.S. models. The most reliable SUVs are the Toyota Land Cruiser, Toyota Highlander, Mitsubishi Endeavor, and Toyota RAV4."

I have tried to reserve judgment about the reasons for the disparity between the Asian and the US manufacturers. I have tried to give the situation the benefit of unbiased examination of the facts, yet I find it hard to come to any other conclusion than that unions are killing the US auto industry. They are involved in every aspect of auto manufacturing: from design development to material sourcing to HR budgeting. I have no love of the management either. Their biggest fault seems to be allowing the unions to metastasize. I'm sure the compensation packages for the top officers don't help the situation, but isn't it just obvious the direction the US companies are headed?

Bethlehem Steel, anyone?

David Dunbar Buick is turning over in his grave. It's time for Lutz to do something bold. GM should give their best designers some seed capital, a couple of plants and then get out of the way, cut Buick loose as a seperate business entity. GM would retain shares but not enough to control the day to day operation.

Chryslers success with the 300M and the Dodge Magnum, demonstrate the viability of a real American sedan as a model for success. Perhaps this new seperate Buick Co should revisit the 1947 Buick, only this time make, your straight8 engine with double overhead cams, and fuel injection. Hmmm. -Spin