By next week, we’ll learn more about GM’s hideous bankruptcy “restructuring” plan.
By next week, we’ll learn more about GM’s hideous bankruptcy “restructuring” plan — which the government expects to have in its lap by early June.
One thing, though, is pretty clear: Performance cars are on the “euthanize” list. No rumor — a sad fact. GM has confirmed that there will be no more SS Impala over at Chevrolet — and the supercharged Cobalt SS will be gradually faded out, beginning with the sedan version later this year followed by total extinction (coupes too) the next. Cobalt will return to being exclusively an econo-box and GM will quit trying to compete in the import sport-compact segment entirely. The SS version of the HHR is also history — and of course, Pontiac (and all its performance-themed cars like the G8, GXP and Solstice) is finis.
GM has even confirmed that there will be no high-performance “V” iteration of the Cadillac STS sedan — and the rumor is that other Cadillac “V” models, like the CTS-V and XLR-V, could be dropped as well.
The biggest potential bombshell, of course, is the prospect that GM will have to cancel the Chevy Camaro, too. Its presence in the lineup is hugely impolitic right now, with GM shaking the proverbial tin cup and hoping taxpayers will dig deep. Selling a completely frivolous steroidal muscle coupe works just fine when, you know, the cars actually sell. But right now such cars are as popular as Dick Cheney and GM management will fold at the first hint of a public thrashing by some posturing pol in D.C., let alone the full weight of Congress (or some back-room arm twisting by President Obama; remember what happened to Wagoner).
Things do not look swell. Ford’s much more established Mustang — a car similar to Camaro but which has deeper roots in the marketplace as well as continuity going for it —isn’t selling. The Dodge Challenger — another reanimated '70s-era muscle car — is the 2009 equivalent of the Studebaker Avanti of the '60s: The final defiant salvo of a doomed and sinking battleship just before it rolls over and disappears forever.
One wonders, though — what exactly will GM sell once it no longer sells anything with muscle (besides Corvette)? Economy cars and hybrids? The Japanese dominate those segments, with new entrants from Korea (and soon, India and China) coming in strong seconds and thirds.
Why has GM chosen to go after the segments and markets where it has been least successful rather than fine-tune what it has historically excelled at?
Yes, I mean larger cars (and trucks) as well as performance-oriented stuff.
Answer? Because GM is still sucking the pipe — and has come to believe the BS emanating out all corners that its woes are due to the lack of frugal and efficient little transportation models and its parallel fixation on severing all ties with rude gas hogs.
Those kind of cars (the gas hogs) were hot commodities — and earned GM big time profits. Toyota and Honda, et al., desperately wanted in on this action, too. What did the Jim Jones on it all was almost overnight $4 gas followed by the sudden collapse of the debt-finance driven economy. The American consumer is tapped out and terrified. He is broke and cannot afford a new car — any car. (Even Toyota, much-touted purveyor of “efficient” cars, experienced its first yearly net loss in decades and in some cases sales are off 30 percent or more.)
None of the jabbering jabberwockies out there want to touch the third rail — the real issue, the Thing Behind it All. And that is the fact that millions of people no longer have inflated home equity lines to tap, but do have a pocket full of maxed out credit cards, 40 percent less in their 401ks — and are scared white that their job (if the still have a job) will be outsourced or right-sized or otherwise disappeared in the very near future — probably funded by their own tax dollars.
So, signing up for a $30k car loan is not high on most people’s agendas right now.
Which means that no matter how they re-arrange the deck chairs on the Titanic, until the buying power (that is, the actual wealth) of the average American recovers, neither will GM — nor anyone else. Those fancy all-electric Volts that GM has on deck for next year? They’re going to sit unsold on dealership lots (the few remaining), right alongside the piled up inventories of unsold Tahoes and Camaros. Wait and see.
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