The real question is can GM turn it around?

By the way, Phil, Japs is a derogatory comment. Also, your argument sounds like every union guys argument for every union employee in the country. I'm not saying GM doesn't need to cut white collar jobs, they do, but you make it sound like that's the only reason. It's never that simple.

Phil,

Thank you for sharing your story with us. Hewison did seem to mention 'executive arrogance' in his blog post, and it's refreshing to have a personal insight on some of the practices that seem to reinforce that viewpoint.

As I said, I'm not up to speed on the fundamentals of the situation, but am surprised at some of the decisions made by management.

One thing that saves GM - chart wise - is that Ford Motor company, as I show above, has an almost identical price chart, meaning that there was sector/industry factors affecting both stocks similarly, which probably contributed more than managerial incompetence. Of course, innovation and creativity could have changed the whole situation, but - as we're seeing now - that has not happened.

Thank you for your comment.

CR,

I'm not as up to speed on the fundamental or news call as Hewison or many others have studied and written - I tend to limit most of my analysis to the charts, so I'm in no way an expert to comment in this area.

I did have similar thoughts when I read the report and watched the video. It didn't make sense why they'd scrap such a potentially profitable idea, but looking back, the desire for hybrids or alternate cars wasn't as strong then as it was now, and gas was more than half the value it was then. In hindsight, it seems "stupid" but I'm sure the brilliant minds at GM had more information than we give them credit so I'm with you on that point.

Regarding:
"You don’t hear Toyota or Honda whine when CAFE standards go up."

Actually, Toyota whined along with the rest at the recent proposals to increase CAFE. They also whined when CA wanted to restrict CO2 emissions from new vehicles in the state. Why would they do this? Because they too make big trucks and, in fact, just started producing out of a newly built multi-billion dollar plant in TX (which is currently running at about 70% capacity utilization now and losing a ton of money).
Toyota and Honda did do a better job of hedging against the possibility of spikes in fuel prices, but a large part of this is that their home market (Japan) has huge gas taxes that tend to favor small vehicles.

By the way, Hewison’s suggestion that GM killed the EV1 because it was afraid it would sell fewer replacement parts is completely ridiculous. Why would GM invest a billion dollars in the EV1, and then kill it because it realized after spending a billion dollars that it would lose some parts sales.
In fact, it's using much of what it learned on the EV1 to design and, eventually, produce the Chevy Volt. Many of the engineers on the EV1 are working on the Chevy Volt. The EV1 didn't make sense in a marketplace where gas cost $1.50 (and, in fact, GM built the EV1 to comply with CA regulators requirements that all mfr selling new vehicles in CA market zero-emission vehicles - the requirement was dropped after GM spent their billion because CA realized that all mfr were having trouble meeting the regulation).

Having worked at GM for 37.6 years ending in June 2006 I have lived thru a lot of GM's blunders. My feeling is that there is so much arogance and greed in the Executive levels and such a reluctance to change that they just don't have a clue. Every time they presented a case to the UAW asking for a break,we gave it to them. The biggest was in 1979 when we(500,000 strong) gave up 11 paid hoildays and froze our pay rates. The reward was not seen in improvements in NAO but in an Asian buying spree with the very money that the UAW gave up so they could fix what needed to be fixed at home. NAO continued to wither and what you have now is the result of a very deliberate plan to tank NAO manufacturing and go global. It is unrealistic to cut wages and still ask for more without any sharing or cuts in the white collar ranks. At my old plant the mgt to worker ratio on the shop floor is around 4 to 1. Keep in mind that a 6 Level makes at least $10 an hour over those who do the grunt work and their pay jumps expotentialy up from there. The General can still do it but not with the current management team they have now. They have to downsize the white collar ranks and learn from the Japs the concept of rapid change to meet ever changing market conditions. You don't hear Toyota or Honda whine when CAFE standards go up. Nope they just go ahead and give what is required. Meanwhile, GM is whining how much it will cost or whatever and draging their feet getting whats needed to market. GM is a trainwreck by its own design. Damn shame ! It is a pathetic CEO who stands on a soap box making $50,000 a day dissing his workers who make $200 a day doing what he and his staff have told them to do but somehow it is their fault. Damn shame !