Day one for The New GM: the more things change... Lutz stays, company needs vehicles that matter
by Sebastian Blanco on Jul 10th 2009 at 1:27PM 
After only 40 days in bankruptcy, General Motors emerged today as the new GM (sans green logo, for now). While the bankruptcy was about as short and sweet as they come, the future is what everyone is most interested in, and it's kind of looking a lot like the present/past.
For one thing, Chevy Volt cheerleader and former General Motors product chief Bob Lutz has reversed his decision to retire at the end of this year and may stick around in either marketing and communications or product design, sources told Automotive News (subs req'd).
As for the company itself, their press release says, among other things, that the new GM has, "A fresh lineup of Chevrolet, Cadillac, Buick and GMC cars, trucks and crossovers, each with leading-edge designs and technologies that matter to both consumers and the environment."
CEO Fritz Henderson wrote that the new GM will focus on "customers, cars and culture," meaning that they need buyers, vehicles that people want to buy and will shift things around in the company to make decisions faster. A lot of this we've heard before. After this morning's press conference, Henderson drove away in a 2010 Cadillac SRX crossover. Were all the Volts busy? is this a sign of what will the future will bring to the
[Source: GM, Automotive News (subs req'd), Green Car Advisor]
Photo by Patricia Drury. Licensed under Creative Commons license 2.0.
PRESS RELEASE:
The New General Motors Company Launches Today
New GM to Focus on Customers, Cars and Culture
* GM gets back to the business of building great cars and trucks, serving customer needs
* New company created from GM's strongest assets
* Four core brands backed by the nation's largest and strongest dealer network
* Streamlined organization on a global basis for faster decisions, sharper focus on the customer
* Commitment to open communications
DETROIT – 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.
"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."
Created from the old GM's strongest operations in an asset sale approved by the bankruptcy court on July 5, the new GM is built on:
* Four core brands in the U.S. and the largest, strongest dealer network in the country,
* A fresh lineup of Chevrolet, Cadillac, Buick and GMC cars, trucks and crossovers, each with leading-edge designs and technologies that matter to both consumers and the environment,
* A competitive cost structure, a cleaner balance sheet, and a stronger liquidity position that will enable GM to invest in new products, key technologies, and its future,
* A winning culture focused on customers and products.
"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.
"Business as usual is over at GM," said Henderson. "Today starts a new era for General Motors and everyone associated with the company. Going forward, the new General Motors is fully committed to listening to customers, responding to consumer and market trends, and empowering the people closest to the customer to make the decisions. 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."
Committed to great cars and trucks
The new General Motors launches with a clear and simple vision – to design, build and sell the best vehicles in the world.
"A successful auto company needs to focus on both the cost and the revenue sides of the business," said Henderson. "Success on the revenue side means building the stylish, high-quality, fuel-efficient vehicles that customers want – and getting them to market fast."
Despite the recent downturn, GM has maintained its cadence of strong new products. In the U.S., for example, the Chevy Camaro has surged past its rivals to lead its segment, while the new Chevy Equinox, Cadillac SRX, and Buick LaCrosse are earning strong initial reviews. Later this year, the Cadillac CTS Sport Wagon and GMC Terrain debut, followed next year by the Chevy Volt, Chevy Cruze and Cadillac CTS Coupe.
This emphasis on great new products is also reflected in the Chevy Agile now launching in Latin America, in the Chevy Cruze and Buick Excelle in Asia Pacific, and in the new Opel Astra in Europe.
Just last month, GM announced its intention to build a new small car at a plant in Orion Township, Michigan, which will add to GM's growing portfolio of fuel-efficient cars and restore approximately 1,400 jobs.
GM also has moved aggressively to develop a full range of energy-saving technologies, including advanced internal combustion engines, biofuels, fuel cells, and hybrids. The company is also a leader in the development of extended-range electric vehicles, with its first model, the Chevy Volt, currently undergoing road testing and scheduled to launch in 2010. The new GM is also taking steps to make advanced battery development a core competency, and expects to make additional announcements on this matter late this summer.
"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."
Stronger brands and dealers
As part of its reinvention, the new GM has also focused its resources on four core brands and a stronger, more effective dealer network.
General Motors' core brands – Chevrolet, Cadillac, Buick and GMC – will have a total of just 34 U.S. nameplates by 2010. This emphasis on fewer, better entries will enable the new GM to put more resources into each nameplate, resulting in better products and stronger marketing.
In May, the company accelerated its dealer consolidation efforts, with the goal of reducing the number of GM dealers in the U.S. from 6,000 this spring to approximately 3,600 by the end of next year. Even so, GM will still have the largest dealer network in the U.S. and GMdealers have committed to continue to improve the total customer experience for GM customers.
"We're also working on new ways to make car buying more convenient for our customers, including an innovative new partnership with eBay in California to revolutionize how people buy vehicles online," Henderson said. "Customers will be able to bid on actual vehicles just like they do in an eBay auction, including the option of choosing a predetermined 'buy it now' price. We'll be testing this and other ideas with our dealers over the next few weeks, and hope to expand and build upon them in the coming months. In all cases, our goal is to make the shopping and buying process as easy as possible for GM customers – on their time and their terms. Stay tuned."
A pledge to regain trust and confidence
General Motors Company is primarily owned by the governments of the United States, Canada and Ontario, and by a trust fund providing medical benefits to UAW retirees. Specifically, common stock will be owned by:
* U.S. Department of the Treasury: 60.8 percent
* UAW Retiree Medical Benefits Trust: 17.5 percent
* Canada and Ontario governments: 11.7 percent
* The old GM: 10 percent
"We are very appreciative of the support provided by the stakeholders through the transformation process. Though General Motors Company will not initially be publicly traded, we will be transparent in our financial and other reporting to further strengthen trust and confidence," said Henderson. "We expect to take the company public again as soon as practical, starting next year, and to repay our government loans as soon as possible. We are required to pay off the loans by 2015, but our goal is to repay them much sooner."
Stronger balance sheet
General Motors Company launches with a strong balance sheet, a competitive cost structure, and a strong cash position, enabling it to compete more effectively with both its U.S. and foreign-based competitors here in the U.S., and to continue its strong presence in growing global markets.
The new company acquired old GM's strongest operations and will have a competitive operating cost structure, partly as a result of recent agreements with the United Auto Workers (UAW) and Canadian Auto Workers (CAW).
In the U.S., the new GM will be a far leaner company. By the end of 2010, the company will operate 34 assembly, powertrain, and stamping plants, down from 47 in 2008, and capacity utilization is expected to reach 100 percent during 2011. Overall U.S. employment will decline from about 91,000 at the end of 2008 to about 64,000 at the end of this year, creating a company sized to respond quickly to changes in the market, while still retaining the global scope necessary to develop world-class products and technologies.
The new GM will begin with a much stronger balance sheet, including U.S. debt of approximately $11 billion, which excludes preferred stock of $9 billion, and could change under fresh-start accounting. In total, obligations have been reduced by more than $40 billion, representing mostly unsecured debt and the VEBA trust fund that provides medical benefits to UAW retirees. The stronger balance sheet and lower break-even point will allow the new GM to reduce its risk, operate profitably at much lower volume levels, and reinvest in the business in the key areas of advanced technology and product development.
GM's subsidiaries outside the United States were acquired by the new company and are expected to continue to operate normally without any interruption.
A new way of doing business
With the launch of the new General Motors, company leaders will work to change the culture of the company, making the speed and decisiveness that GM demonstrated over the past several months the new way of doing business, and adding an intensified focus on the customer.
Edward E. Whitacre, Jr., who oversaw the creation of the new AT&T, will serve as chairman of a GM board with a number of new directors. Henderson will continue as president and chief executive officer, working closely with Whitacre. He also will take responsibility for GM's operations in North America, eliminating the GM North America president position.
To speed day-to-day decision-making, two senior leadership forums, the Automotive Strategy Board and Automotive Product Board, will be replaced by a single, smaller executive committee, which will meet more frequently and focus on business results, products, brands, and customers.
Bob Lutz has agreed to join the new GM as vice chairman responsible for all creative elements of products and customer relationships. Lutz and Tom Stephens, vice chairman, product development, will work together as a team, partnering with Ed Welburn, vice president of design, to guide all creative aspects of design. GM's brands, marketing, advertising, and communications will report to Lutz for consistent messaging and results. He will report to Henderson, and be part of the newly formed executive committee.
"I am pleased to announce that we are 'unretiring' Bob Lutz so he can fill this important position in the new GM," said Henderson. "He has a proven track record of unleashing creativity in the design and development of GM cars and trucks. This new role allows him to take that passion a step further, applying it to other parts of GM that connect directly with customers."
General Motors will also end its regional operating structure, moving decisions closer to the customer. This eliminates the regional president positions and the regional strategy boards. Nick Reilly will be named executive vice president of GM International Operations (GMIO) which will be based in Shanghai.
GM is also removing layers of management – reducing the number of U.S. executives by 35 percent and overall U.S. salaried employment by 20 percent by the end of this year – flattening the organization and speeding decision making.
Additional details of the new structure and leadership moves will be communicated later this month, said Henderson. "These and other actions will simplify our organizational structure and reduce the level of bureaucracy that, in the past, has prevented GM from moving faster."
More direct communications
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."
Henderson and other General Motors leaders will go on the road regularly to meet with consumers and others with a stake in the new GM. "In August, we'll begin regular visits with customers, dealers, suppliers, employees and others – in the U.S. and abroad – who impact our relationships with customers. We'll be listening to their ideas, and acting on the ones that will improve our ability to serve our customers better. And of course, other executives and I will continue to reach out to customers through our ongoing web and Twitter chats.
"Today we launch the new General Motors, and our promise is simple. We will be profitable, we will repay our loans as soon as possible, and our cars and trucks will be among the best in the world," said Henderson. "We recognize that we've been given a rare second chance at GM, and we are very grateful for that. And we appreciate the fact that we now have the tools to get the job done.
"To our current customers, we appreciate the confidence that you have placed in us, and going forward, we'll offer you nothing less than great cars, trucks and crossovers, with unmatched customer service. To those who have supported us through this challenging time, we are deeply grateful," said Henderson. "And to those who have never tried a GM vehicle – or who have tried one and been disappointed – we look forward to the chance to win your business and earn your trust."
# # #
About General Motors: General Motors Company, one of the world's largest automakers, traces its roots back to 1908. With its global headquarters in Detroit, GM employs 235,000 people in every major region of the world and does business in some 140 countries. GM and its strategic partners produce cars and trucks in 34 countries, and sell and service these vehicles through the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Holden, Opel, Vauxhall and Wuling. GM's largest national market is the United States, followed by China, Brazil, the United Kingdom, Canada, Russia and Germany. GM's OnStar subsidiary is the industry leader in vehicle safety, security and information services. General Motors Company acquired operations from General Motors Corporation on July 10, 2009, and references to prior periods in this and other press materials refer to operations of the old General Motors Corporation. More information on the new General Motors Company can be found at www.gm.com.
Reader Comments (Page 1 of 2)
Yanquetino 1:41PM (7/10/2009)
Uh... in the above photo... does the resemblance of the Rennaissance Center to fingers on a hand say it all?
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Anonymouse 1:44PM (7/10/2009)
Well, I guess to the new GM, global warming is a "Crock of sh*t" again, and the way to promote the Volt is once again go on national television to call environmentalists ugly and talk down the car as slow.
Welcome back, old GM.
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Alan 5:42PM (7/10/2009)
"Same as it ever was" Talking Heads (no pun intended)
Surfing the "car" net(s) one sees huge gas guzzlin' domestic products being touted Mustange Snake, Camaro YUK, Tahoe double YUK. But truly innnovative companies are talking about 70mpg Golf's, 60mpg Mini's, 40mpg S-class autos from Merc's and BMW's and Audi - Something is very wrong with our GM (Gluttonous Motors). Even under the gun they have theeir heads up their 5 litre tail pipe!
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vince 11:44AM (7/13/2009)
That s-class uses HCCI, which Gm is also developing and has probably one of the best working designs so far. Also, adding DI to its 4 cylinders seems to really help, the DI equinox get the same mpg as the malibu/accord/camry despite being huge and 180hp. Putting DI on the 4 cylinders and mating it to 6spds (tech they already have), combined with reducing weight (what they need to work on) would prbly give them the boost they need. A lot of their vehicles are heavy, so my bet is they plan to reduce weight, add DI, and according to an ABG article from the other day, GM ordered 100,000 batteries for their BAS+ which will make their BAS more of a "real" hybrid (it will actually help the car accelerate, not just stop the engine).
Tyler Durden 2:06PM (7/10/2009)
Dear Fritz and Putz,
FU
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augustus 5:32PM (7/10/2009)
Amen.
Sean 9:14PM (7/10/2009)
I still don't get why they killed Pontiac and not Buick. Who the hell buys a Buick and what does the brand stand for? Fat, old retirees who like golf? Didn't they just dig Cadillac OUT of that demographic? So great, they're streamlining how to make bad decisions even faster. On taxpayers money! My only hope is that when the time comes for the next bailout (and it will), we won't give it to them.
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nickoo 1:05AM (7/11/2009)
Buick is the number 1 selling brand in China. And the new Buicks are definitely more stylish.
Chauncey 9:35AM (7/11/2009)
#1 in China?, well I'll be damned. As for "stylish", to each his own I guess! Didn't know about the China angle, thx.
Nick P. 2:34PM (7/10/2009)
They kept a straight face long enough to go through the bankruptcy. Then, they all drove off in their gaz-guzlers screaming "Suckers!"
Seriously, I'm still hoping that the Volt is a success because this will definitely drive the whole industry forward.
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Win39 3:04PM (7/10/2009)
Not really much chance of the Volt being a success, I think. Same people are being left in charge who have already said it will cost $40K and they promised not to make many. As the NY Times said this morning they have sold off the good stuff. What is left is Cadillacs, Buicks, and trucks. Well, a few Chevrolets, but their heart is not in that division, obviously. Wonder how they expect to meet CAFE standards. Can they really sell that many Korean cars with Chevy bowties on the front? I saw an interesting article, maybe here, that the reason they kept two luxury car divisions is that the Chinese supposedly love Buicks. These guys think there is a big market in tariff protected China for luxury cars despite China's growing apprehension to their own petroleum consumption. These GM people seem to have no idea about what they should be doing. As usual. It is like watching an episode of the Simpsons.
augustus 5:31PM (7/10/2009)
The Volt cannot be a success because it costs too much and will cost too much until 2013 or so.
Now if GM wanted to play to win in the CAFE game then they could be a success by selling the Volt at a loss for $30k and dropping all the cars that they sell to meet CAFE requirements (e.g. aveo). Then GM would fire the unused workers who are no longer selling dropped fuel efficient models and focus on trucks, SUVS, crossovers and enough Volts to meet CAFE.
But that will never happen because we all know that the last thing that GM will do is fire more UAW members.
Nick P. 2:56PM (7/11/2009)
We need the EV market to get a shot in the arm, like the hybrids right now with the success of the Prius. Toyota's success is forcing everyone to drop what they were doing (diesel, hydrogen, mix-fuel) and try to grab some of that market share.
The first manufacturer to successfully mass produce EVs must create the same type of envy from other manufacturers. If it's a failure, then nobody will want to follow and we'll be back to EV-1 era crush fest.
So even if I won't buy any GM (yeuk!), I hope for a successful Volt program.
Rob O. 3:31PM (7/10/2009)
If they're truly devoted to being focused on culture, they have a social responsibility to apply the same moneygrubbing fervor that's reaped fortunes over the past 50 years towards making Americans feel ok about smaller, less resource-wasteful cars. Enough of the "By God, if you ain't got yerself a big dick truck, well heck, ya just ain't much of a man, now are ya?" attitude aptly reinforced by uberpatriotic John Mellencamp soundtracks.
They shaped our redneck preferences for what they defined as muscular cars. Now it's time for them to sell America on smaller, energy-efficient, appropriately-sized vehicles being cool.
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augustus 5:27PM (7/10/2009)
What planet are you from? GM threw any profit to the UAW and their healthcare plan. GM's #1 responsibility is to stay in business (which I doubt they will be able to do).
Lou Grinzo 4:01PM (7/10/2009)
Lutz is back? Well whoop-de-frickin-do.
As for the Volt being a success: I've been predicting ever since GM announced the 40 mile battery range that they would either trim that back dramatically or offer the car in multiple ranges, with the 40 mile unit being the high end. (This assumes there's no complete game-changing breakthrough in battery technology in time to make a difference.) I still think that's the most likely scenario.
GM screwed up royally by making such a big deal out of the 40 mile range, simply because it pushes up the price and squeezes sales. They should have planned for more than one battery size from the start.
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Gary 11:10AM (7/13/2009)
Some people complain that 40 miles isn't enough, and now you say it's too much?
augustus 5:24PM (7/10/2009)
"A fresh lineup of Chevrolet, Cadillac, Buick and GMC cars, trucks and crossovers, each with leading-edge designs and technologies that matter to both consumers and the environment."
"Leading edge technologies" like plastic door handles to reduce cost? Buy some chrome'd metal ya cheapskates!
"leading-edge designs" like anything Buick makes.
" that matter to both consumers" Like the Chevy Aveo which you couldn't give away for free.
New GM = Old GM with three years of cash to burn. Thank goodness my tax money went towards this.
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Nozferat 5:43PM (7/10/2009)
Well...it was either this or more war....take your pick...40% of every tax dollar you spend right now is so the military can continue its fight for "freedom"....what a bunch of bull.
Chris 1:20PM (7/13/2009)
Nozferat: Educate yourself, for God's sake.
http://en.wikipedia.org/wiki/Military_budget_of_the_United_States
Spending on entitlement programs has increased at a MUCH faster rate. But I suppose you're all for paying for abortions or for subsidizing single mothers to have more kids than she already does even though she doesn't have a job and no means to support herself other than the government, right?