Stock Picks-Is GM Chairman Losing It?

8217;t you just love it? General Motors can’tallows you to take a profit out of the sale.
make a quality car to save its life, which is whatThat’s how you lose money, and you
it’s trying to do, and it wants Nissan to give itcan’t make it up on volume.
billions of dollars to show respect for a failed company.You also have the issue of your competition’s
Over the last couple of years, you have heard ofpricing. The other guys are giving their customers
failed nation states, many of them in Africa. Countriesperceived value and real value. The value is so great,
that can’t feed themselves, and have justthat it is disallowing you a profit in the vehicles that you
about as much wealth as is necessary to put anare putting on the market. It’s that simple.
embassy in NY, so their diplomats can dine at theBut wait, there’s more!!
United Nations, and park overnight with diplomaticToyota, your main rival for world supremacy just
plates.came out with a new Lexus LS 460 with built in
Now we have failed corporate states like Generalfeatures that GM isn’t even thinking about.
Motors who can’t get out of their own way,It’s not even on the drawing boards at GM.
and probably have no justification for remaining inTHE LEXUS CAR PARKS ITSELF. It’s got
business other than the fact that they’ve beensonar distance finding devices that link up to its
around for something approaching a century. If younavigation system. This thing can pull into a parallel
really think about it, other than the employees whoparking position with the driver basically watching the
would anyone miss General Motors if they went outcar park itself.
of business tomorrow, maybe even today. TheMercedes will envy the paint job at twice the price,
remaining players would immediately pick up theirand a first ever 8-speed transmission. How does a car
market share, and we wouldn’t have to watchwith 380 horsepower get 19 miles to the gallon
the slow market attrition that is taking that share downanyway? With a crash sensing system that prepares
anyway.the brakes and airbags for the coming impact, this
There will come a time if they remain in business, thatLexus may give new meaning to the word safety.
only aliens coming to visit our planet will buy GeneralWhat’s going on here? For $70,000, Lexus will
Motors vehicles. The news recently is ludicrous. Carlosgive you a car that BMW, and Mercedes can’t
Ghosn runs Nissan-Renault. This man has done aeven dream about making for the price.
world-class turnaround over the last several years,I have talked with representatives of the Japanese
making billions of dollars for a company that very fewautomobile companies. They think GM is on the ropes,
thought could be turned around.and who can argue. The old giant is pumping out iron
Rick Wagoner is the typical corporate bureaucrat thatthat just doesn’t do it anymore. The only
spent decades at GM while its market share slid downemployees happy at the company are hebephrenics
the tubes. The two of them have been talking abouton the assembly line who are taking too many pain
some sort of consortium at the behest ofkillers. There’s also Chairman Rick Wagoner
GM’s major shareholder Kirk Kerkorian, whowho appears to be constipated in every interview he
wants GM turned around tonight, today, yesterday.gives, and wants a financial tribute from Nissan to boot.
Wagoner has now decided that Nissan should payThe Future of GM
GM billions of dollars for GM’s perceivedGeneral Motors will continue to exist. If the consumer
greater value.bought only on the basis of quality, and bang for the
What value? Hey dude, you just lost $10 billion lastbuck, GM would have filed for bankruptcy years ago.
year. You’ve bought out thirty five thousandThe consumer buys for other reasons though, aside
employees that you can’t find work for.from quality. Some have never driven a Japanese car,
You’re a textbook case study in how to loseand wouldn’t consider it. Once you drive
money by selling inferior products, and you believe youJapanese, buying American cars becomes unthinkable.
bring greater value to a partnership with Nissan, thanSome buyers live in sections of the country where
Nissan brings to you. HELLO, ANYBODY HOME?there is peer group pressure to buy American, such as
One of the first lessons anybody learns if they arethe Midwest.
active in the stock market is, you have to deal withPeople on the East coast, and West coast however
reality, not your perceived reality, but what’shave basically shunned GM’s vehicles. The Big
really taking place. GM has yet to do a full, truthful3 automaker will never recapture anything in those
self-assessment and figure out where they are. Whattwo markets again. I can’t imagine how they
are you doing wrong? You can’t be doingturn around corporate morale. With seventeen layers
things right, and lose $10 billion in a year. You’veof management compared to Toyota’s five, I
got sales all right, but your customers are sodon’t know how anyone is proud to say,
disenchanted with your product that they are not“I work for GM”.
allowing you to price your product at a number that