VOLT: 40 miles and counting…

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Without any second thought we can say today that we are witnessing the Electrifying transition phase in Auto industry which has the potential of becoming the game changer for the Industry in many aspects. Lets not go in those aspect right now, but think of the future of the transportation. Why still drive a car which is using almost the similar technology used by our great great grand parents? While we always see technologies are getting older in the matter of months not even years, why Auto industry is still injecting gasoline in the cylinder to cover those miles. Well here is your answer… VOLT.
Volt is not only the answer from GM of the decade old question ‘who killed the electric car?’ but also the answer to those who believed GM is just a dead elephant. Well in many sense equipped with many ground breaking technologies Volt is not only going to be the face of the GM future but also going to be the benchmark for the auto industry. Without any doubt in coming years there will be four wheelers coming into the market which is going to be more sophisticated and more advance than current Volt, but for sure this vehicle has the full potential to become the spearhead of that new era of automobile.
Well, I do accept when I became the part of HEV team working for Volt and other products and started learning about this car, I had many questions and doubts. I was skeptical about the technology, I was skeptical about its acceptance in the market, I was skeptical about its practicality and I also doubted its status as an Electric vehicle. Well I spent some more time and not all my doubts got clear but also became the fan of its technology. I feel privileged to work with the team who are involved in the development of this product. In US when I took a test ride of this car on MPG (Milford Proving Ground), my appreciation for this car only increased by many folds.
This car holds the key for the future status of survived GM but again its just the beginning. Currently working for some other future products from GM which are supposed to be launched around 2014, I have no doubt over what would the car of future will look like. But lets talk Volt here.
There are several queries about Volt which keep circulating among many car enthusiasts. There is no prize money for answering these question, so I am answering them in the shortest possible way first and later will discuss in some what detail. Here we go…
Is Volt an Electric car?... Yes
Is Volt is only an Electric car?... No
Is it better than current Electric cars from other manufacturers, e.g. Nissan leaf etc.?... Yes
Is it an answer to current environmental concerns?... Yes and No
Will it be successful?... Good potential
Is it just some other ground breaking technology than Electric drive?... Yes
I will answer them in more detail as I will keep moving ahead in this blog.

There are many things which are interesting about this extraordinary car, but let me try to bring some of interesting facts along with the slides provided by GM website.


Yes… It is an Electrical vehicle. For first 40miles (around 64km) it runs on electricity ONLY. So if you are daily commutation limits in this range you actually burn zero gallon gasoline.
Initial claim was for 60 miles (almost 100km), which I still believe should be the range of the vehicle. You may call me greedy but I would have loved to see that range from this vehicle. Also the initial concept look of Volt was very aggressive, like Camaro but they had to smoothen the sharp angels may be considering aerodynamic aspect.


You run out of charge in the long drive. Off course you would not like to spend hours to charge your battery to make it run again. No problem, you have onboard conventional IC engine which can run your vehicle as well as charge the battery as vehicle keeps moving. So in other way its better than just an electric car which may need hours to run again once it got discharge. You may think of it as an Hybrid but again it only uses electricity till 40miles. No Gas. It gives extended range using IC engine and that’s why called EREV (Extended Range Electric Vehicle).


I can say this because I have felt it in person. I can bet over if you can say vehicle is on or off. There are several other features including the styling of the vehicle which make you feel you are in some sort of technical advanced car and being a technical person, it feels great.



Well quite honestly saying before reading this even I was not very sure of all these mentioned features. But sounds cool. Isn’t? well, considering current driving style we might not need or use some of these feature but again its future. You like it or hate it but these applications are gonna be stay and will not only limited to Volt but also will extend to other vehicles.



Now here is for the end users, which certainly not going to be here. There initial plan is to launch it in US and also in China. In Europe they are launching this technology under Opel brand. Out of these I like Bose Audio the most. I had experienced it in Cadillac STS and it was mind blowing. Warranty for battery and drivetrain for 8 years is really class apart. Well I can’t comment on lease price but believe it is very competitive.


Well its for the guys in the US. But I will advise if get a chance take a test drive of this vehicle, and if you find it awesome which I believe you will then don’t forget to appreciate the automotive engineers involved in its development:)



Well it’s a new promising technology in Auto industry which promises a lot and I believe is capable of delivering most of it. There are many issues which may not be answered right now until Volt come on the road and spend some time. Some of them would like, is it really environment friendly? At very first glance it seems it is as it has the capacity to eliminate green house gas significantly but again it carries almost 200kg Li ion battery which does not go very well with environment. Disposing and recycling would be an issue in coming years. Just an million vehicle sold would mean 200million Kg of Li ion battery and will keep increasing with years to come… well lets see.


But one thing for sure, it’s a new car with some new technologies never before. It might have taken much more time than expected to come in the market but better late than never. Also, may be GM has learned after burning its hand. It still got criticized for killing its Electric vehicle, just imagine if they would have pursued those EV after 20 years how much different and developed electric vehicle we would be seeing. They would be far ahead than Toyota or any other manufacturer for that matter which claim to be number one in Hybrid and Electric vehicle market. Well its never too late and in couple of months we would be seeing this car on the road moving forward smoothly with its driver to the future...

These all snap shots are from GM site.

Opel: Deal or No Deal

　

It was never the first choice for GM to sell off its European hand Opel to Fiat or Magna or to anyone for that matter. Last few months GM has witnessed its one of the worst crisis ever which has not only almost claimed its existence but also in this period it made GM sold its iconic brand Hummer and Saab to almost unknown companies for the price of peanuts. When the economic hurricane has subsidized a bit, till then GM has lost its crown which was intact for more than three quarter of the century and became certainly a leaner if not a meaner organization.

GM sold its one European brand Saab to a tiny company Koenigsegg, a Luxury sports car manufacturer who has the presence in the Top 10 list of world’s fastest cars.
Well, another European unit Opel accounts for significant GM Share in EU market. If GM would have sold its share in Opel, definitely it would have been almost whipped from EU, not so pleasant situation for the automaker.


No doubt it was not the move which has been received warmly by everyone but with this decision GM has faced lots of criticism not from the industry but also from the government of Germany and Russia. But again, its business, where ethics always throws towel whenever it faces profit and greed heads on. This whole deal took a long time while seeing many ups and downs. Now even after GM declared not to sell Opel, condition of Opel has not become any clearer, in fact became a bit uncertain. Where Magna plan was not in the favor of laying off workers more than 2600 and without shutting down any of its plant, GM doesn’t make any such kind of promise. No doubt Magna was also German’s choice for this reason. So very obviously after turning its back from the deal GM management has been told to return the bridge loan of 1.5 billion Euro till the end of this month. Hopefully GM may manage to return it since it is now become Government Motors and it has the support of the US treasury, if they justify their move. Meanwhile Russian Prime Minister Mr Putin didn’t say much about the situation but his disappointment was pretty evident from his statement that he has learned his lesson from this deal. One can only hope that the economical relation between Cold war rivals is going to be unaffected with this U-turn. GM CEO Henderson already made an apologizing statement but sure it’s not going to sooth their temper any sooner.

　
Well, these all were the situations considering the bidder side in the Opel deal, Magna and Sperbank. Now lets see GM’s stand. Only future will say this step was good or bad but one thing for sure in this economic turmoil situation GM was not in the drivers seat while making the deal. GM has already sold its muscular Hummer to a Chinese heavy machinery company for some $200m odd value, which was even less than half of expected value. Surely GM has to improve its fuel economic image and while Hummer was not a profiting hand, it has to go. Another was Saab which was hardly ever profitable since it has been acquired by GM. So its deal also didn’t hurt much to GM. But Opel story is completely different. Opel captures a significant percentage of European market share and has some very good model in its kitty. Also, build on the Volt platform Ampera is supposed to launch in coming year as an Electric vehicle. Here was one of the major concerns for GM with this deal, loosing its grip over its intellectual property which not only accounts for numerous patents and technologies but also they overlap significantly with GM’s core technology these days. No wonder GM management was not able to digest this and also they were not finding any suitable way out of this issue.

After the elimination of Fiat from the bidding, it was taking way too long for Magna to close the deal and meanwhile economy and Auto sector has started to see the light in the tunnel. Cash for clunkers, stimulus packages, and massive cost cuttings have shown some positive signs and almost all Auto manufacturers and major Auto markets data saw north after long time. Ford has already posted its long awaited billion dollar quarterly profit followed by Toyota, performing way better than wall street prediction of losses. GM was also not left behind in riding the wave of change as it has reported after long the growth in the sell percentage of its car in North America whereas it continues breaking all self made previous records in China, world’s latest largest Auto market.

Seeing these positive signs GM has changed its mind to sell Opel. Off course it has shattered the dream of Magna to enter the auto sector as OEM. But well again, win for some is the loss for some.

Now as GM has retained Opel, this is the easy part. Now hard part comes which is to restructure the company and making it profitable unit. After breaking the trust of the government and the employee, it’s not going to be an easy task for the management. No doubt GM has put its veteran Bob Lutz to come up with a plan. Also, the most successful GM employee in current time Nick Reilly, president of GMIO is going to handle GM European operation replacing Carl Forster from the Opel top position who is supposedly moving to manage Jaguar Land Rover owned by Nano famed Tata Motors. Well this addition and subtraction at top slot in not a Herculean task for the company but the company will have acid test when it will come to manage at lower level considering workers layoff and huge cost cutting is inevitable with chances of some plant closure. In addition to this workers and government are already unhappy. But considering the success story of Nick Reilly its going to be interesting to see how they make their plan viable.

Well the outcome of the whole drama may get clear after some time but lets just hope for a while it will come positive for the former world Auto champion. The whole Opel case may turn around as sweet for some or sour for some but for sure its going to be a hell of a case study in Auto Sector.

God bless GM...

The era of procrastination, of half measures, of soothing and baffling expedients, of delays is coming to its close. In its place we are entering a period of consequences.
…Winston Churchill

It may not be said in Automotive industry context, but it completely suits today’s scenario of Auto market.

So it is now pretty evident that now GM will follow the footsteps of its younger brother Chrysler. June 1st seems to be the date when the king of Automobile will come in the court to file chapter 11 bankruptcy and will try to protect its remaining reputation in the global market.
Last quarter result seemed to be the final nail in its coffin, when GM had reported net loss of $6 billion (Loss of $9.66 per share), though it was less than expected as per Reuters, who has estimated loss of $11.05 per share. I could only manage to stop my laugh after reading those line “less than expected” even after posting $6 b loss. May be they wanted more from the former world no1. But this time honor goes to new world champion Toyota after posting quarter loss of $6.9 billion with annual loss of $8.9 billion. Now the lean company Toyota president Mr Watanabe must be feeling the heat after reporting consecutive bad report cards. OK, I am not going to comment over Toyota.

Showing consistency in negative growth GM has reported significant drop in its market share. Only hope came from GM Asia Pacific reason where in spite of overall market sell was down GM was able to post some single digit growth rate. Thanks to China and India where GM is reporting positive growth rate. Buick is trying to makeup of GM loss, which has reported around 60% growth in China. India also is trying to give it share in GM growth by giving positive result in the highly competitive and crowded small car segment with Chevy Spark. Captiva is also proving to be right choice but it deals in a highly low volume market segment in India. So, after this quarter result now GM CEO Mr Fritz Henderson is now accepting that bankruptcy is now the most feasible option. Well, I don’t see whether they have any other option.

This week only I was attending All Employee Meeting with Ron Yuile, Executive Director and CEO GMPT-AP, Where he was addressing curious GM India employee and was trying to answer the question. Not surprisingly the talk of bankruptcy was in the core of talk. Well, he has said that now GM bankruptcy is almost inevitable and we might be filling for chapter 11 on 1st June, deadline given by Obama government. What I could not understand him saying that in August GM will be out of bankruptcy and New lean mean GM will take off from there. I wish the same. But will it be possible? If you have such a futuristic vision, how could you let this situation come? I know filling for bankruptcy is your choice but at the same time coming out of it is not yours and its not so easy. You have to make tougher and quick decision then and after seeing the past report of GM decision taking capacity, it doesn’t give a bright hope. But yes, Current CEO Mr Henderson seems a bit quick and clear while taking decision. Here GM has started relying on the positive starting of Chrysler bankruptcy and hoping that Chrysler will come out of it within two months. Hence to go for a quick bankruptcy should be a good and feasible way for GM too. Sounds good. But is it for real?

Chrysler major operation stays in North America and Fiat alone was capable of taking control of the troubled automaker not to mention at a fire sell price. Even after all these now it seems tough for Chrysler to come out of chapter11 in 2 months, as per Reuters analysts it may take up to 2 years. Now here is GM, Operating almost all over world. I am not going to discuss about GM-AP and GM-LAAM operation as their financial results are not as bad if not good. But North America and Europe operations really needs a complete face lift. Where GM NA is facing the burden of seven big brands (Chevrolet, Cadillac, Buick, Pontiac, Buick, Saturn, Hummer), Europe also is in a deep mesh. Now its pretty clear that GM will be almost done with Europe market and drastically reduced in its home market too after either selling or phasing out its legendry brands. I really feel sorry about Pontiac, one of my favorite car with more than eighty years of glorious history and models (GTO, Bonneville, Sunfire,G6, Grand Prix, Grand Am, Solstice, etc)behind him.

After Saab, now its other strong unit Opel is under the hammer. Fiat, Magna and many others are waiting to grasp this golden opportunity to take control over this brand. Recently launched Opel Insignia is doing pretty well but now its late for GM to keep maker of Roadster. They have to say now bye (buy) Opel.Since last June GM is trying to sell its Hummer brand which is just proving as keeping and feeding an elephant in recent years. But even after one year GM is unable to close a good deal for its iconic brand. Now it’s clear that it may not get the desired price for this Off-road 4X4 monster. Same way Saturn is also not in the good book of GM. So here is the situation, Once after acquiring several brands to create a global common name GM, which has kept all the brands under one umbrella for almost a century now they are removing them one by one.

With four brands Chevy, Cadillac, GMC and Buick, GM will be a relatively small company but will it become a lean and profitable organization…lets see. With reduced brands and reduced market share GM will not reclaim the top spot in the Auto industry in near future. But I wish at least it mark its presence in the future, as it was my dream to work in GM after visiting Renaissance Center.

In case (most likely) GM files for bankruptcy, end of Detroit reign will almost come to an end. As only ford out of Big3 will remain out of court but again even Ford is now much smaller than its glorious days and now struggling to get rid of its quarterly report in red ink.Coming Back to GM now it’s a critical time or can say last chance to survive. Whatever mistakes you have done in your golden time will always hunt you back in your turmoil period. Its like there is no escape from mistakes. But yes, learn from it, don’t repeat it and grow over it are our only obligations. Prosperity and poverty may show two extreme faces. Its prosperity which defines your strength, guts and wisdom but its poverty which tests them.

Even after shutting down many plants and laying off thousands of employee if GM survives and emerge stronger then it would be a real life time accomplishment of Mr Fritz Henderson. I wish him luck...God bless GM.

911: Auto Sector

I just opened the list of Forbes 2000 companies of 2009 (www.forbes.com).

Actually after reading that GE is the rank1 company for the year 2009 (market value $89.87b), suddenly I got curious that what is the ranking of GM, once upon the undisputed No.1 for almost half a century. When I became tired of searching the name of GM in the list which was ranking wise I decided to search by the name wise(Actually I was hopeful that I will find the ranking in top20, Toyota is No.3). It took some effort to find the rank finally. In this economic turmoil period there are very few news which have enough potential to surprise you. But here it was. GM rank: 844
(www.forbes.com/lists/2009/18/global-09_The-Global-2000_Rank.html).

All other company you know, name it and they are far far ahead then GM. Even Eaton was under 500. I checked it again for verification, but it didn’t change. With the net market valuation of $1.37, it is just a billion dollar company now. It has already lost almost all the money in the market and showing the consistency in reporting losses quarter after quarter, year after year. Once the share value of GM which was touching $100, has seen as low as $1.27 in recent days. Who knows it is not the bottom yet.

After shaking the CEO Mr Rick Wagoner, things have hardly turned in a way which we can say better. I am surprised too by the Obama government stand on Auto sector. Putting hundreds of billions of dollars to City, AIG and like companies make sense to these guys, but providing few billions to these wounded Auto giants are taking numerous meetings and planning. After witnessing a significant part of the bailout money, which is nothing but the taxpayer share, is going in the bonus and maintaining the luxuries of so called executive, Mr Obama only showed his disappointment. House was unhappy with the Big3 top rankers by using their corporate jets and eventually they came via ground transport next time. But it was Citygroup who is buying corporate jets from the bailout money, why such discriminations? Why is such hesitation to provide the loan amount of around $30b to these guys, who was one year before the No1 Company in the world for continuous 77 years. Here is AIG getting bailout and supports even after making loss of $60b in a quarter and here is Auto guys who are still in search of supporting hands even after going through numerous meetings and deadlines for a more viable plan. It won’t be surprising if we see in coming months that just to approve the viable plan these so called intellectuals have taken so much time that company itself has vanished. Its like one is calling 911 in fire and at the place of getting immediate understanding and support, that one is being asked for the description and urgency of the situations, so that they will sit and decide whether to help and support that guy or not. If you know what is not a good viable plan then you must be knowing what it is. If so why don’t you provide the viable plan to these companies to act upon and ask their agreement on it and save some critical time.

I am not playing a critique here and won’t comment on Mr. Wagoner capability and working. But one thing for sure, whatever he had faced was the mistakes of previous management team mostly. And considering his stepping out seems more political than rational. May be Mr Obama wants to show his people that he is not only giving easy tax money to these guys but also acting tough and punishing them for their mistakes. Its not that guys at the bottom line are being axed but also guys at the top are facing the heat. If that is the case, then why not with big guys of City, why not of AIG?
Seems these wall street executives have enough influence on the government decision making capacity and process. Also, government need their support in many cases, so lets not burn hand. This only shows here that Mr. Wagoner has just been proven sacrificial lamb.

Lets not criticize this event as well, coz its critical to concentrate on critical issues. Mr Henderson, the current CEO of GM is just continuing the restructure plan which was started by the ex-CEO. He is also a bit more vocal about the possible Chapter11 bankruptcy for the company. Considering the sell of the vehicle is directly related to the sentiments of customers, filling for Chapter11 is not the most eligible candidate in this situation.
Another lifeline has been provided by government, within 60 days come up with a more viable plan to get the aid. Also, Mr. Nardelli, CEO Chrysler has been asked to finalize the deal with Fiat by the end of April to get the support from the government. Remaining brother of these two, Ford seems to be in a bit more healthy and secure condition right now and also recovering at the same time. Thanks to Mr. Mulally, who has shown some vision and acted aggressively to restructure the company. Result, now it has better ranking than GM and share price is leading too. Public is also more optimistic about Ford right now, which is showing in the vehicle sell data of recent months.

Now facing loss after more than 70years, Toyota is again towards another loss. This time estimated loss is approx $5-6b. Toyota, who got the No1 slot last year and current world’s 3rd biggest company could get this position only because GM has lost ground continuously for several years (more than $80b has been lost since 2004 by GM). Now tough time for this new No1 has come too.

In this tough and transition phase of auto sector any prediction or speculations are pretty uncertain. But what is expected and hoped from the government that Auto sector should not be treated as a step son, coz this sector itself has a potential to reform this recession phase. After all millions of people had worked day and night to create this sector and are still attached directly or indirectly to this sector and working positively in this negative atmosphere.
Let’s give them a positive hope.

Auto Run 2008

It is a transition phase for the globe not only in the field of economy or finance but at the same time in many other sectors as well. Domination of West has been challenged and replaced by the East. Collapse of North American structure has shaken the foundation of European Union as well. Even Asia Pacific and other parts of globe are not immune with this one of the worst financial situation of the century but the effect has been modulated and we didn’t see any big setbacks apart from market slow down here.

OK…I wont go in much details of these huge and complicated area of economics. Even I am not an eligible candidate to comment on it right now. Here I will focus on the Automotive Sector in this turmoil period primarily.
As mentioned this transition phase has also been seen in the world of wheels. In fact it was most obvious in this sector. 2008 didn’t come as a big surprise package for auto experts. Because whatever came from the quarter results and number, only thing was unexpected that it was worse than the expected.

Toyota has outsold GM in number game of vehicle sold in 2008. 77 years of North American domination has been ended by one of the smallest but hardest working country. As per the company released reports, GM has sold around 8.3 million vehicle in the year 2008 approx 0.6million less than Toyota. GM has seen the decline of around 11% of sales compare to last year after crude oil has risen to record high. Again it was not a surprise as observing previous few years numbers it was clear that its only a matter of time that when Toyota out thrown GM from No.1. GM still has something to breathe as it retained the crown at its home turf, which is the biggest market of automobiles in the world. But considering the performance and decline of the auto major it wont come as a surprise if it looses at its home market as well eventually.
But certainly there are some surprises stored for auto pundits. First time in history, after 70 years Toyota has registered a loss. This was not welcomed by Japanese but the Big 3 should take a lesson from this. Toyota has responded after the loss one year, whereas Big 3 are so lazy to take any aggressive step even after registering losses year after years.

Ask for more surprise?
Here comes the biggie. China was never or I will say very few times came as a surprise in a technical field especially in innovation and never heard in automotive sector.
This year NAIAS is an exception. BYD(Build Your Dreams), 2nd largest manufacturer of Li ion battery in the world came up with production version of their electric vehicle fleet which has not only surprised auto pundits but also send a clear warning message to all Auto makers including invincible Japanese and Germans.
Whatever they claim about their Electric Vehicle e6 is really like a dream wish. Lets just see what these Chinese people has done and come up with.

Specification of the Vehicle (e6)

Range: 250mile(400km)
Charging time: 1Hr
50%charge: 10min
80%charge: 15min
Seating capacity: 5 persons
Battery type: Fe
Top Speed: 160km/hr
0-100km: <8Sec
Emission: Zero.(For more or detail specification and the vehicle check www.byd.com)

Can you ask for more?
Even if it is half true, it will give volt, the most ambitious plan of GM a run for money.

Compare to Volt’s range of 40miles it has 250miles. Charging time of Volt will take 5-6 times more than what BYD claims. Also, seeing their pace and claim that vehicle will be launch within an year compare to estimated launch of Volt in 2011-2012, I don’t understand where GM stand a chance against this new innovation.

GM has always boasted its continuous investments in RnD. But for last so many years it is still waiting for such breakthrough innovations and ideas to come. Whereas, approx 20 year old companies are coming with such ideas, which will not only change the way we drive but it claims to become No.1 in coming 10-15years.
BYD is not only a threat for GM but also for Toyota and others at the same time. It may lead another transition in auto industry. From NA to Japan and now from Japan to China. ICE was lead by NA, so Hybrid was lead by Japan and now here comes China, started to claim the EV segment.

After the President Mr Obama has taken charge of White House, it would be his Herculean task to revive Auto industry of NA and reclaim the supremacy of this sector again. Already cash starved and cramp auto industry in NA will how long survive such blows, nobody knows.

After GM stepped back to acquire Chrysler, Fiat has now bought approx 30% of the stakes of this dying company. Even Fiat is not in a good health but its long awaited wish to come in NA has come true. It has got a nice platform to penetrate in NA market. Only concern remains, like Cerberus, Fiat don’t burn its hand in this deal. By mid of 2009 Fiat is expected to acquire more than 50% of Chrysler stake to take the ownership of the company. After Japanese, here comes Italian Stallion in NA. anything else GM management wish for. In flood you are getting rain. God bless GM.

As per COO of GM, it will run out of cash by 31 March after paying its due bills. Hopefully they have another slot of bridge loan pending which was promised my ex Bush administration. But this is not at all a permanent solution to revive a company. Its like feeding an starving elephant from house grocery. Whatever you do, you cant full its appetite. Just by giving the money of taxpayer to some incapable management is not a wise idea.

2008 has shown the reality of so many things. It has removed mask and shown the real picture and face of the otherwise glamorous market and industry. But it made us to think that it’s a high time to go for a reality check.

But again it’s a new year and it will be a new start. Only thing which should remain with us is hope. It’s a world of survival of the fittest. But being the fittest, needs lots of effort and practice. Lost at one front doesn’t mean end of the battle. There will be lots of challenges coming and continue to come till you say quit. But that is the best part of the market. So many came, so many will come. Ideas, companies, products, changes, setbacks, technologies, people, management…will keep coming one after another but…the show must go on.

Now or Never…

For last couple of months I was closely following the bailout news for the Big 3 in USA. GM and other two of the Big3 group was desperate for this support…I know they were anxious far more than me but like many other employee of GM, I was curious too. It was a must needed fuel for the cash starving US Auto Industry.
After the initial jolt from the Senate this loan of $17.4 billion came as a relief, at least for now. Out of this $9.4 billion will be provided to GM instantly and remaining amount on later stage. Chrysler too will get $4 billion right now. As a GM employee I welcome this step of the President Mr. Bush. But considering the way the big boys of these companies have performed in recent years, its totally unforgiving. Even as per the statement from White House, filling for bankruptcy would be the most eligible option for these automakers but considering already crumbling economy, loosing another sector entirely would be a knock out blow for the country.


Currently around 2,39,000 employees are working for the biggest manufacturer of Automobile. Combining all the suppliers, vendors, dealers and other related industries almost 2.5 million workforce is related directly or indirectly to GM. Considering the overall strength of the total workforce in automotive industry which is close to 3.5 million, this is a major portion. White House major concern was loosing these millions of job resulting from the collapse of Big3. How can you take this job loss of millions of people in the case of this economy slowdown? Even after paying billions of dollars of these guys to other financial companies in bailout and in a result you are laying off these poor taxpayers.

Its not a story of single night. For last several years all these American companies are loosing their money and market share quarter by quarter. How can these guys be so immature not to take a notice of this? Out of three Chrysler is the worst performer by loosing market share by 28%. GM and Ford are not far behind either.


Lets talk a bit about GM...
Since 2004, GM has lost more than $75 billion. Is it ringing some bell?
Still sounds not very appealing data, lets talk about another one… In a year company has lost more than 90% of the company share value. For decades, GM has provided several examples of their products, methods, and management processes, reviewed as case study in Ivy League colleges, which has kept this company at no.1 position for most of the part of the century. Now here goes another example from GM to be reviewed as a case study… how they lost their market share and everything so rapidly?
...Interesting?
You bet.


On September 30 GM had the reserve of $16 billion, not enough to continue operation past December. With this government loan, now GM can at least think to continue its operations for next few coming months. But at the same time again this loan is not assured one on which GM can blindly rely. If by March 31st GM doesn’t come up with a viable plan for restructuring the company, this loan will be called back and this will guarantee the bankruptcy of the organization. Pretty surprising, till this date GM and other companies could not come up with a plan which could satisfy White House. Just hope they have any such viable plan.


Talking about another one, Ford is currently in a better shape. Irrespective of their other bailout mate, Ford may need the cash after couple of quarter. Thanks to Mr. Mullaly who showed at least some vision and started restructuring his organization from 2006 itself. Selling out its loss making units, optimizing the production lines and reducing their workforces have put Ford today in a far better health than GM and Chrysler. They acted and acted aggressively. Other two should have at least taken some lessons from this company.
But at the same time Ford is not immune of the market and if GM and Chrysler collapse, it will shake the foundation of Ford too.

Next in the row is Chrysler, worst performer among three. Now seems even Cerberus is not willing to feed this elephant. According to their board of directors, Cerberus has already put more than allowed cash in this cash starving company. Looks like now they are just looking for a buyer who can buy this company. While buying Chrysler they looked very happy as thought they got a very cheap deal and after some time they will either sell this company for higher margin or they can turn around this company in a profitable one. Now it’s a well known fact that Cerberus has burnt their hands in this deal.

Cerberus is no longer in a mood to retain Chrysler and currently GM is not in a good health, so that it can go with this merger deal. It may be critical decision for both of them. It may not be good for Chrysler employee, as it will result in heavy lay off in that organization. Also, GM will have to invest billions in this cash strapped situation. If GM could not get it right, it will sink the ships of both the company together. But GM can get enough liquidity from Chrysler with this deal. Also, they can work together on the overlapping technology between two companies as well as they can have common dealers. Looks like this deal would be lucrative for GM, but again to go for it, GM should look for all the aspect as this could be their last mistakes…in case.

GMAC is among another loosing sector of the organization, which was once a major source of GM marketing and selling of its cars. But currently its share in the GM sell has reduced drastically. Currently GM has 49% stake in GMAC and Cerberus owns 51%. One deal GM can check to exchange the GMAC stake to Cerberus for the stake of Chrysler.

GM current situation is the reward of the inefficient management of the inefficient management for a long time. Even GM is making big promises and swearing for a revival, how much these top guys can be trusted, is a concern.
Gone are the time when you had the luxury of sitting and thinking. Its time to act, react and perform. Much needed restructuring of the organization is the most vital decision right now, which management has to do it with priority.
The most ambitious plan of GM is getting delayed. Looks like they were waiting for the bailout. Its beyond understanding why the most hyped and ambitious project is taking the back sit.

What should be the decision on Hummer? It’s an ancient question in GM. Surprisingly, in this critical situation, such critical questions are not getting answered for more than a year. How can a company be so lethargic in such adverse scenario?
Its not about what you lost, but its about what you could save from the house in fire. While in storm, to make your ship light you have to through the heavy stuffs out of the ship, no matter how much dear they are. Hummer is currently one of the heaviest loads on the company, which is supposed to be removed in spite it is the image of GM in off road vehicle segment.

Even after getting loans and big promises by Big three to make their company more competitive, leaner and efficient, questions remain unanswered. Considering their lethargic approach in reacting to this tragedy of lifetime, they are not looking very aggressive. If not now…when? Didn’t they have enough lessons from their past?
Its never too late…is this statement holds true for these companies right now? Do they still have chance of revival? Even their own country and President has lost their faith in these companies. While giving loan Mr. President has told, to go bankrupt would be the best option for these companies but considering already collapsed market, this is not a good option to loose another millions of job, considering this month only more than half a million got laid off. It clearly shows getting loan was not the very choice of White House. They got loan considering the adverse effect that it may cause with collapse. But clearly those guys were not pretty happy with the management and the way they are working.

This is another, may be the last opportunity provided to these companies. Its their last chance to prove. Its nothing less than do or die situation.
Also, to counter Japanese all three have to act together and with force. Together they may consider a joint venture to share technology and facility at least for coming few years. It may reduce the unwanted models from the market and will be beneficial for all 3 at the same time. It may cause initial job loss, but it will help to regain the reputation of US in the automotive industry. It will be a win-win situation for all 3 and also for employees eventually.

Renaissance Center: Waiting for Renaissance

Once upon a time there was a company called GM…and story goes on.

Above line may seems like a line from a Science Fiction book where a character is chatting with another about the automotive industries of past. The question is… how far is that future?

Not surprisingly GM has created the most reputed name in the Automotive world ever which belongs to several brands and their world class models. Ruled the planet for more than three quarter of the century, it is the Blue Whale of Automotive Ocean. And if someone is saying less than a couple of year before that GM is going to die in a year…everyone who has having even the slightest idea of this industry on wheels would have think that person is the most crazy and foolish person in this world. But observing the current situation of the market, if someone is saying GM will survive beyond six months (here I am becoming optimistic) without government support, again he/she must be considered now in the same category as above.

After loosing its share value more than 95% in almost a year, once one of the biggest company in the world is on its knees in front of the government asking for a bailout. After the report of third quarter loss of $2.5 billion company market value dropped to a record low of $2.67 billion (per share value $3.36, Nov11, 2008). Cash reserve of the company came to an alarming value of $16.6 billion after the end of third quarter. As per company it needs between $11 to $14 billion to remain operative. Seeing this data and looking at the current market trend end of GM seems inevitable. Even after the assurance by President elect Obama, survival of GM is not guaranteed. As per Deutsche bank analyst, GM has not enough cash to continue operation beyond December and without government assistance collapse of GM is certain. Every other day GM share is touching new low which is not only giving blow to already injured company but also shaking the trust of people in the company’s future.

Such bad shape of the company didn’t happen in a single day, month or quarter. But GM along with Ford and Chrysler were loosing money for several past years. Even after seeing the down trend, these companies were too stubborn to acknowledge the loss and its future impact. Result, in 1960’s when GM has half the market share came to the first decade of 21^st century when it has merely around 20% of market share. They are loosing on their home ground by the outsider. Seems outsider has a better idea of their home customers. Fall of GM will not only risk the millions of job losses but it will be the epicenter for the radical crises which will include tier1-tier2 suppliers, dealers, financial market. Even US government understands that GM is too big to loose but at the same time GM is so huge that it may not be easy to protect it as a whole. Initially request was of $25billion for bailout for the Big three was modified to $50billion in just a month. But even the medicine of this much amount doesn’t guarantee the cure of this illness.

If management truly wants to come out of this trauma they need to reform the whole organization and redefine the way it operates. Rules set in the last century may need not be correct in the current scenario. If you are loosing at your home pitch where you have ruled for a century then certainly it’s a high time to recall your basics. Not just rely on the help which may or may not come in the way but act accordingly with all your guts.

When whole world is moving towards fuel efficiency, is it smart to bank on your previous successful fuel thirsty models. Change with the time and adapt fast with the new technology. The technology which has been developed by GM is being used by other company to capture its home market. This is surly the lack of vision. Otherwise, electric vehicle which was the concept of GM motors would not come from other company’s stable. Also, GM is a cluster of several brands like Cadillac, Chevrolet, Pontiac, GMC, Saab, Saturn, Buick, Hummer which acts like hindrance in many cases for upcoming brilliant design. To reform the company whole company need to be restructured. Even USA government is not going to provide a big blank check unless GM assures that it is going to restructure the company for the future.

GM is not just a company which will end if it fall, but it will be the end of the dreams, efforts and believes of millions of people who had and who are working together to help the civilization to move fast for more than a century. Even in this crisis of the lifetime GM is keeping its head up for the future. Brilliant designs and breakthrough futuristic cars are in the pipeline which are committed to change the way we used to travel. Volt, Eflex are just few names who are going to redefine the future of automotive industry but their own existence is dependent on the future of the company. To redesign the future it is needed to redesign the whole structure of the whole organization. Its good to have big ambition and dream of bright future but don’t forget the shaking present which is the foundation for the coming next 100 years of GM and Automotives. Lets hope the story of GM doesn’t shape as the story of dinosaurs but it turned to be the story of the evolution. We may not have the leadership of legendry Lee Iaccoca this time but we do have the learning of the episode of Chrysler revival. Seriously in this high time we are missing his kind of leadership.

Nevertheless its not time for expecting a hero to come and save but to execute as a team. Lets hope and work together for a bigger, brighter and stronger future and bring a brand new Renaissance at Renaissance Center.