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Entries in GM (72)

Thursday
Nov272014

New President at GM

Since last week there is a new president at GM Canada.

As you know The Colonel has been associated in one fashion or another with General Motors in Canada for a few decades.

Q: Colonel assume you had an opportunity to have a relaxed lunch with the new president of GM at Fazio's in Oshawa (yes its  a far fetched thought)...what would you tell him?

A: Guys its an ambitious thought, although the food is very good at Fazio's. Here goes...

Sales:

Its shameful for GM to be in 3rd place, do we need to say more...just plain shameful and inexcusable.

Product:

Its good, its competent, in some cases brilliant, and others uninspired. Capitalize on the "inspired" models.

Financial Services:

Offer comprehensive financial services to facilitate selling the product, being innovative would help to increase sales.

Oshawa:

Imagine a "social media" campaign to boycott GM products in Canada if they alter downward the current level of employment in Oshawa.

Q: Simple enough...

A: Simple, but complex, and a real challenge for GM.

Q: Colonel, have you noticed that some of the car lines 50% of the models do well, the other 50% is non performing.

A: Yes...we have driven and reviewed most of them, great product, with poor market alignment.

Q: Poor market alignment, care to explain?

A: There are folks at GM that are paid interesting salaries for doing this...why are we doing this for free?

Q: 'Cause you're a good guy...

A: Lets look at Buick for a moment: Lacrosse is a great car even has the sweep spear, with no identity in the market to attract a younger customer base. Regal another great car without an identity. Verano, proves that Buick has a 30K ceiling in the market. Encore same thing reinforces the 30K ceiling. Enclave, it was inspired from the outset, and now its a mature model in a competitive segment.

Q: Colonel we thought you were going to start with Cadillac.

A: Guys you are sucking me into a lengthy discussion. we have driven most Cadillacs in the past few years, and we are Cadillac fans. They are cool cars, literally world class, in an hyper competitive segment

Q: Are you saying that its a world class car and GM for one reason or another does not connect all the dots and handicaps the market performance.

A: Precisely...

 

 

Monday
Nov102014

Pick Up Battles

There is a serious philosophical pick up battle that is preparing itself. 

Perhaps you remember when pick ups were physically much smaller, most had 8 foot boxes, a fender side was a toy truck. They were made out of steel with a wood floor in the box, the rear step bumper was always an option. 

The simplicity of a pick up (compared to a car) was a cool factor...

The 1/2 ton pick up was for light work, the 3/4 ton remains the work tool, the 1 ton was a specialized tool. In the day manual transmissions were the choice especially in a 3/4 ton. Back to the simplicity, tradition.

Pick ups have grown dramatically in size through the years.

If there is one segment in North America that has not been "cracked" by imports its pick ups. The Detroit 3 own the segment, the F150 is the best selling vehicle in Canada for longer than many folks are alive. GM upholds the tradition of a GMC and Chevrolet truck. Chrysler in the early 1990's started the "big grille" trend.

With stricter fuel economy ratings on the immediate horizon, the landscape of the battlefield is clearly defined for all the contenders.

Lets focus on 1/2 tons since a 3/4 ton due to its GVW is usually above the fuel economy ratings. 

Ram: gets the ball rolling with the Eco Diesel V6 touting compact car fuel economy on a full size pick up. Its a good strategy to have a smaller diesel available to surpass the fuel economy ratings. 

GM: the redesigned pick ups, although competent, and full of features, for one reason or another did not capture the imagination. Bold grilles, smoother lines, full complement of luxury features. The other strategy deployed by GM is to revisit/re execute the mid size pick up. Mid size, small diesel engine...

Ford: focuses on weight, if you reduce weight, need a smaller engine, gain in fuel economy. Aluminum is the old school / classic way to reduce weight. Easy...lets do an aluminum pick up. 

It will be revealing in the ensuing months to observe which strategy is the best, and most enduring.

 

 

Thursday
Sep182014

Thoughts on Cadillac

The Colonel just joined us for a coffee, and since the latest price revelation on Cadillac we are anxious to have The Colonel share his thoughts. Lets get going.

Q: Colonel, you look prepared and aggressive this morning.

A: Thanks guys, its my usual persona, perhaps a little too aggressive.

Q: Cadillacs were "The Standard of the World" at one time.

A: That was a few generations ago, when I was a kid a Cadillac was the standard of the world.

Q: What happened?

A: I had an epiphany in the mid 1980's when Mercedes-Benz launched the 300E and Cadillac launched the Cimarron. One car became a world class benchmark, the other became the subject of jokes.

Q: Anything else?

A: In the same time frame or a few years earlier, the old folks of that time coming out of the recession of the early 1980's were trading in their Cadillacs in droves for German cars.

Q: At that time not only were they losing existing customers, they did not have a product to attract new customers.

A: Precisely, here was Cadillac pounding itself into the ground.

Q: Today Cadillac has a good product.

A: In 2014 we can say that most Cadillacs are phenomenal cars, they are literally world class.

Q: That good?

A: Absolutely, you don't expect it, but they are that good, if not better.

Q: You are saying that anyone that did not get close to a Cadillac in a while if they would experience an ATS or a CTS would be totally impressed with the cars.

A: Yes, they would even wonder why it took them so long to catch on...that they are good cars. 

Q: Such good cars and their sales are sporadic.

A: Isn't that a challenge, good cars and not selling enough of them to secure a position in the segments.

Q: The SRX does reasonably well in Canada?

A: Yes...its getting old since the resouces were placed on the sedans.

Q: What is the problem? 

A: Simple, PRICE.

Q: Are you implying that they are too much money? 

A: At times its bewildering to watch GM deploy their pricing strategies, and the market conveying a blunt sledgehammer message to GM. Its the same with Cadillac, its a clear message from the market.

Q: How about the Cadillac leadership which has gone through a revolving door of late.

A: That did not help, and this latest leadership is not helping either reinforcing the surrent pricing strategy.

Q: You had misgivings about this latest leadership move.

A: Absolutely, huge doubts, and now its totally scary. Cadillac just told their competition that they are going to sit on the sidelines for the next decade until the market comes to them. 

Q: Its the story of superb cars with a flawed selling strategy, and now encouraging its competition.

A: Its scary in its simplicity.

 

 

Wednesday
Sep102014

The Pontiac Saga

Some issues seem to have a life of their own. The Pontiac saga in Canada continues to endure.

We have always been of the opinion that losing Pontiac deeply affected GM sales in Canada. In addition to greatly assisting Korean manufacturers in quickly establishing additional sales points.

Not only did GM close Pontiac sales points, created internal turmoil; it quickly assisted its Korean competitors. 

Some Pontiac dealers in desirable "open points" for the Koreans did well, and very quickly. Other dealers did not do so well. In addition to the various buy and sell side agreements to ideally consolidate the GM dealers into the ideal "full line" representation.

It begs the question "How much sales momentum did GM lose in Canada?"

A few years ago we were reading about various legal positions regarding the closings, and the various players and stakeholders that were involved. Back then it seemd a little complicated, and convoluted.

Yesterday the trial started, this article in the Globe and Mail provides a glimpse of the proceedings, stakeholders, conflicts.

It will be interesting to see how these legal proceedings develop, and who will come out ahead.

 

 

Wednesday
Aug202014

427 Truck Engine

A bit of nostalgia this morning. If you have been around this business long enough you remember, and perhaps you even sold GMC trucks with 427's way back in the day.

Here is the deal:

Back in the day a GMC or Chevrolet truck with a 366, 5 speed, 9 front, 18,500 2 speed in the back, 10.00x20 tires and a 27,500 lbs GVW was the standard of the industry. These trucks sold by themselves, they had such a reputation of being the best.

At one point GM truns the 366 to a 427, as an aside this was not the same 427 as in cars, it had a tall deck block, and was used in trucks and marine applications. Although the 366 was bullet proof. The 427's were not lasting as long. 

Numerous folks at GM were scratching their heads as to why a 366 would easily last over 200,000 kms in a truck and the 427 was barely lasting 100,000 kms. 

Here is another deal:

Been in the business long enough you hopefully remember a company called McCallum that was transporting GM vehicles from the factory or rail heads to GM dealers in eastern Canada. McCallum had a numerous tractors with 427's pulling their trailers. Yes...they did not last very long the 427's.

GM in Canada enlisted McCallum to run various tests on various configurations of 427's. GM will install an engine in a McCallum truck, have the truck cover a speciifc mileage, take the engine out, replace it with another engine. Obvious do a meticulous tear down of the engine taken out of the truck. Yes...the old tachographs were helpful during the tear down.

The conclusion...not enough gas flow, the 427 required appreciably more gas than the 366. The by now iconic single 200 liter step tank with an electric fuel pump for the 366 created instances of fuel starvation with the 427. The solution...dual step tanks with dual fuel pumps.

Another deal:

In Canada, a 427, with a 5 and 4, 12 front, 38,000 in the back, with an Hendrickson suspension was the standard dump truck for countless years.

At the time GM had the medium duty truck market "locked up" with the 366 and 427.

The last deal:

Yes...the 427 were strong performers on the highway, very strong. Fuel economy...don't ask.