Automotive News reports that General Motors is strong-arming dealers into signing a statement opposing congressional legislation that would reverse the company’s decision to close more than a thousand of its dealerships. AN quotes a letter Sen. Charles Grassley, R-Iowa sent to GM CEO Fritz Henderson as saying “It’s alarming to have GM corporate leaders force dealers — some who are losing everything they worked hard to build — to take an active stand against it.”

The bills would restore the eliminated dealerships of GM and Chrysler, forcing the companies to work through state courts rather than the U.S. Bankruptcy court to close the dealerships. Complaints have come in all across the country of GM district offices pressuring the surviving dealerships to sign the statement. It’s not really surprising that GM is playing hardball with its remaining dealers, and maybe they should back off a little.

To me, the bigger problem is that such legislation exists in the first place. It’s hard to see this as little more than a purely political move on par with Rush Limbaugh’s ludicrous call to boycott GM altogether. Partisanship in Congress and across the nation has reached such a fever pitch that opponents of the GM bailout would rather see the company fail — and have absolutely no prospect of recovering any of the bailout money, which is supposed to be repaid by 2015 — than have it succeed and have a manufacturing giant restored to at least some of its former glory. A strong manufacturing base is critical to the U.S. economy, and it has been slipping away for decades. Are short-term political goals more important than the long-term health of one of our major industries? At the very least, isn’t it worth it for the company to be successful enough to repay its debt to American taxpayers?

In all honesty, I’ve been on the fence about this whole bailout thing from the beginning, unsure if throwing billions of dollars at a company with such deeply ingrained problems was a good idea. However, what’s done is done, and it seems to me as though voices calling for the failure of the GM bailout are similar in tenor to those on the left who hoped the U.S. effort in Iraq would fail just because it would make Bush look bad. I’ll leave the hard-core political punditry to those on the left and right who have much more practice than I do. Instead, I’ll just see this legislation for what it is: Opposition for the sake of opposition, rather than an attempt to actually do any good.

Most importantly, GM’s cars are better than ever, but convincing people remains a monumental task for GM’s marketing and PR departments. So I got curious: Are you ready to give GM a shot? Say yay or nay below, and explain yourself in the comments!

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A new General Motors was born yesterday, shedding debt, dealers, disastrous products and I’m sure a few other alliterative entities I can’t think of right now. The new company is leaner, greener, less burdened by debt and with an even labor playing field that should — in theory — allow the automaker to compete in the toughest market it has ever seen.

So after all this cutting and shedding and contracting, what’s left? Quite a bit, really. With four brands the company will have a product portfolio of 34 nameplates. That’s a lot, but no more than Toyota, depending on how you count it. New, better stuff is in the pipeline, and it’s a good bet that even the lowball GM products — such as the Chevy Cobalt — will be replaced within the next 18 to 24 months.

Still, there’s a lot for GM to do, and I’m not just talking about consolidating management structures or reshuffling the titles on various business cards (like retaining Bob Lutz as product czar). There’s still one more huge mountain GM has to climb, one that even this new and improved company may not be able to manage: convincing people my age to buy its cars.
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Turns out they don’t have the money, so they asked the European Investment Bank for $600 million to get the job done.

As part of the agreement, Koenigsegg — and by extension, the EIB — will get full control of Saab, including its upcoming product lineup which includes a new 9-5, 9-3, and a rumored crossover based on the same highly touted chassis that’s now doing service in the Saturn Vue, Cadillac SRX, GMC Terrain and the upcoming Chevy Equinox. It will also get a company with significantly squandered brand value that hasn’t turned a profit in a decade, and one that will have to struggle along with mediocre GM knockoffs until the new wondercars are ready.

So, has Koenigsegg bitten off more than it can chew, as the graphic above suggests? Time will tell, but I maintain that a small niche manufacturer like Koenigsegg is just what Saab needs. Let’s face it: Koenigsegg is nothing if not focused on making excellent cars that blow away expectations. If it can bring that kind of sensibility to Saab, the brand could witness a resurgence the likes of which are unrivaled.

On the other hand, it could be a $600 million dollar boondoggle. Thoughts? Sound off in the poll below!

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After months of buildup, loans, headlines, anticipation and more speculation about the what-ifs than one could ever have predicted, General Motors, the 102-year-old preeminent U.S. automaker, once holder of more than half of all U.S. domestic marketshare, innovator of countless technologies, has filed for bankruptcy protection under Chapter 11.

It’s about time.

While bankruptcy talk has been in the mainstream media for the past several months, a colleague of mine once quipped that GM had been going bankrupt for the past 30 years. At the time, I was quite a bit younger, and thought she was just being a smartass. However, over the years I realized that she was absolutely correct.

GM posted its first loss for 59 years in 1980, after the dismal decade of the 70s tanked car sales and left the company with an uncompetitive lineup of cars. During the 80s, its market share plummeted from 45 percent to less than 35 percent thanks to lousy products like the Chevy Citation and its offspring, the Pontiac Fiero, craptacular minivans and tons of other woefully uncompetitive  products. At the same time, the company wasted billions launching Saturn, a wholly redundant car company that was in many ways an admission that GM’s existing five divisions were so hidebound in the way they did things that they were incapable of building a decent small car.

Of course, that’s all history. One can talk about lousy GM cars until the end of time; the Corvair, the Vega, the Fiero, the Aztek, and countless other flops. Tons of pundits are weighing in of course, and the New York Times has a great timeline of GM’s success, and failures, along with relevant articles.

However, despite all the talk of “Government Motors,” the death of capitalism, taxpayers on the hook and tons of other doomsday scenarios, I think GM’s bankruptcy is the best news to come out of the company in decades. The company will be smaller, leaner, have a new board of directors and the best of its current product lineup. Problem is, it doesn’t go far enough.

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These days, conventional wisdom says that GM will probably go into bankruptcy proceedings beginning in June, and that thanks to the “two-GM” plan that has previously been laid out, that it will be relatively quick and easy.

Not so fast, according to an article in today’s New York Times. An analysis piece by Jonathan D. Glater delves deeper into the possibilities, and concludes that a bankruptcy judge, even one sympathetic to the Obama administration’s side, may not act so quickly.

According to Glater, it goes something like this. A bankruptcy judge would have to listen to the demands of both unions and bondholders, both of whom stand to be financially wiped out in the proposed GM split. Federal bankruptcy code dictates that good-faith negotiations occur before drastic measures can be taken, and we all know how long that can take. If the bankruptcy takes months or years, instead of the weeks that the administration and executives hope for, it could ruin the company’s revenue stream as wary buyers stayed away.

There’s another problem. Glater notes that comparisons of GM to the Lehman Brothers bankruptcy are faulty for a simple reason: Lehman was bought Barclays, a third party. However, under the proposed split, GM would essentially be selling itself to itself, creating a precedent for other bankruptcies that a judge may not be willing to set.

It’s all a good read, and definitely worth a look for those following this GM soap opera.

New York Times

There are a lot of rumors swirling right now about whether GM, after getting billions in government loans to stave it off, will wind up filing for bankruptcy anyhow. Moody’s is putting the chances at 70 percent, and a recent article in Reuters says that the company is in “intense” and “earnest” preparations for bankruptcy.

Are the rumors true? Is it really going to happen? Will GM get what it needs outside of court? Is Reuters right about GM preparing for an inevitable bankruptcy? What, in short, is going on?

There are three possible likely scenarios: It’s all true, it’s kind of true, and it’s a bluff.

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The Wall Street Journal has posted an interesting story that speculates on what exactly would happen to GM if the company were to declare bankruptcy. Not surprisingly, contingency plans are already on the table and have been under discussion for a while in case the restructuring plans don’t satisfy the Obama Administration’s apparently hard-nosed committee.

According to the WSJ, the plan would go something like this. There would be two GMs, a “good” GM and a “bad” GM. Good GM would get the brands that are worth saving: Chevrolet, Buick, Cadillac and GMC. It would also get to dump the billions of dollars in retiree and health care benefits that are currently killing the automaker. Those obligations, underperforming plants, and other problematic elements would be transferred to bad GM, along with the lower-performing brands Hummer, Saturn and Pontiac. Good GM would potentially get out of bankruptcy faster since it would retain the parts of the company that are doing well. Bad GM would stay in bankruptcy longer, either being sold off piece by piece or simply shuttered altogether. Interestingly, one debt that would stay with the good GM is the $20 billion in government loans the company has thus far received. The biggest stumbling block would be getting the UAW to agree to an entirely new contract with significantly cut benefits.

Definitely an interesting read, as it also goes into how a Chrysler bankruptcy might work.

Wall Street Journal

By now you’ve likely already heard that the Obama Administration requested that Rick Wagoner step aside as GM’s CEO (it’s been in all the papers). I’m not terribly surprised by this development, as is, well, nobody.

It’s not fair to blame Wagoner entirely for the current state of GM. A colleague of mine once said that GM had been in the process of going bankrupt for 30 years, and she was absolutely right. The company has suffered for decades from poor management, lousy products, ridiculously bad market predictions, squandered equity, laughable labor contracts, and of course brand bloat. Wagoner inherited a lot of the problems that GM has, which makes me a little surprised that Obama isn’t more sympathetic.

The Wagoner regime hasn’t been all bad. It has given us some of the best cars GM has ever produced, from the new Cadillac CTS to the Chevy Malibu, the Buick Enclave to the Tahoe Hybrid. In fact, pretty much every car GM has introduced since about 2007 has been at least competitive, if not an outright class leader.
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JD Power and Associates released its annual dependability study today, the one that Lexus has used for more than a decade to tout its best-in-industry reliability. Well, not anymore. Lexus has lost its crown to, of all companies, Buick and Jaguar.

OK, Buick I can understand. One of the secrets of General Motors is that its cars are actually screwed together quite well these days. The General has made huge strides in assembly quality, relaibity, dependability, driver enjoyment, and all the other hot-button issues. Do they have room for improvement? Sure, but everyone can get better, and GM is really right up there these days. Besides, Buicks are actually pretty nice. Sure, the LaCrosse may be a little dull, and the Lucerne is definitely old-school, but neither are actually bad cars. And the Enclave, well, it simply kicks butt.

But Jaguar? Jaguar? Wow, I’m impressed. Seriously, if Jag is ranking higher than Lexus, that’s saying a lot. The company improved from 10th place from last year, but the overall improvement over the years defies the company’s well-deserved reputation for building beautiful, fast, and horribly unreliable cars. As recently as a couple years ago, I was floored by the slipshod way in which a Jag XK was put together. In fairness, it was a pre-production car, but panels shouldn’t come off on anything that’s even remotely ready for prime-time.

Enough griping. Congrats, you two on a job well done. I fully expect to see annoying “guess who knocked Lexus off the most-dependable pedastal” commercials within the next few days.