• Jun 6th 2006 at 2:42PM
  • 16
Speaking to General Motors' Annual Meeting of stockholders, the company's Chairman and CEO, Rick Wagoner, was generally upbeat about the progress of GM's restructuring plan, pointing to a profitable first quarter in Europe, strong growth in the Asia Pacific region (particularly China), and rising sales in Latin America, Africa and the Middle East as evidence of the company's success globally.

With respect to the all-important North American operation, Wagoner was bullish on the success of its recent "launch vehicles" (GM-speak for new models), such as the Chevy HHR, Saturn Sky, Pontiac G6 convertible, HUMMER H3, and new full-size SUVs, predicting that launch vehicles would account for fully 30 percent of GM U.S. sales in 2006, and about 40 percent in 2007.

More after the jump... Answering a question from the floor on the possibility of slimming down GM's elaborate brand structure, an issue raised by board member Jerry York back in January when he suggested selling off the Saab and HUMMER brands, Wagoner said GM was not planning to drop any of its eight brands.

On the cost-cutting front, Wagoner predicted that GM would succeed in cutting $7 billion in structural costs in North America by the end of the year. With respect to operating costs, Wagoner cautioned that rising raw materials costs may cause the company to fall short of its goal of a $1 billion cost reduction for this year.

Tops on Wagoner's "to do" list going forward:
  • maximizing the UAW employee buyout program
  • the Delphi restructuring
  • closing the sale of General Motors Acceptance Corp.
  • new product launches (Saturn Aura, Outlook and Vue hybrid, GMC/Chevy full-size trucks, GMC Acadia, and Buick Enclave)
  • ramping up E85 production

As the meeting continues Tuesday, GM's management faces voting on tough proposals from shareholders, including one to split the Chairman and CEO positions currently held by Wagoner.

[Sources: GM, Reuters]

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    • 1 Second Ago
      • 9 Years Ago
      "Sure cars can be built on a similar platform, but does a Soltice look remotely close to a Sky? Not at all,and The performance is certainly different. Does a Malibu look the slightest bit like a G6?"

      Ya just had to use there only two examples didn't ya!!!! :-)
      • 9 Years Ago
      I think GM needs to put all the executives on a plane and drop them on a desert island.

      Then replace the UAW with robots.
      • 9 Years Ago

      You can theorize all you want about those "maybes". But there are no maybes in the bottom line. You either sell and make a profit, or you don't.

      But then again, Toyota doesn't need an explanation.
      • 9 Years Ago

      Badge engineering is not as bad as you guys have been brainwashed to think and here is why...

      Why would a real car buyer care about a car they are going to purchase being a badge engineered vehicle? I state "real car buyer" because it is only the critics (and some of you are are amateur critics) that really care (or act like they care). I mean, Toyota sells over 400K Camrys. If Chevy sold 200K Cobalts and Pontiac sold 150K G5s that would mean that there are 150K less cars EXACTLY the same as your Cobalt on the road and 150K which are close. If the Camry owners can live with so many of the EXACT same isn't it A LITTLE better for someone to have the choice of a different dash or bumpers or grille if that is the gist of the car you want to purchase?

      Furthermore, go look at laundry detergents (just as one example) next time you are in the store. Procter & Gamble offer three BRANDS and Unilever offers at least two brands that I can remember. NO ONE, I MEAN, NO ONE talks about the cannibalization of the laundry brands for P&G. You like Tide, the next person likes Cheer and the next likes Gain. All owned by P&G. Because they are not under a microscope like GM (and Ford) most Americans have no clue P&G offers three brands for what is the same thing, laundry detergent, AND most Americans could not tell you the advantage of one over the other. But no one brainwashed you to think that this badge engineering is the worst thing a company could do.

      Gain: "Available in Original Fresh, Gentle Breeze, Island Fresh, Whitewater Fresh, Gain with Bleach Alternative, Gain with Bleach Powder and Gain HE (High Efficiency)"

      Tide: "Tide Liquid with Bleach Alternative... Tide HE is specially formulated to...Available in Tide Clean Breeze Powder, Tide Mountain Spring Powder, Tide Tropical Clean Powder, Tide Original Scent and Tide Free Powder" etc. etc.

      Cheer:"Specially designed for high-efficiency machines... Cheer Fresh Linen adds a crisp, clean scent to your laundry..."

      Come on, is Island and Tropical the same or nearly the same crap? Is the HE from one, a badge engineering of the other? So they change the smell maybe, so Pontiac changes the grille.

      Now it is to the point where GM can make the Sky and Solstice look as different as they are and people complain. How can a woman with brown hair, brown eyes, at 5'3" and 105 be "beautiful" and another with the same things I just mentioned be "ugly"? Maybe the Cobalt grille is just not what you like and the Pontiac one is, so you buy the G5. Maybe you like the Pontiac dealer service better and you bought cars there for 20 years and the Chevy dealer you don't like or whatever. It's a little different but no worse than the Camry selling 400K cars. There is no exclusivity here. If you are that worried get off your tails, make a ton of money and buy a car that is exclusive and stop brainwashing people to believe that it is the end of the world to offer similar cars. It just isn't.

      It brings the price of cars down by sharing parts. In the particular case of the G5 the dealers were telling GM they wanted a smaller car and they wanted it now.

      Maybe instead of selling 200K Cobalts it does cannibalize and there are 150K Cobalts sold and 50K G5s, so what, that means GM was smarter to put 1 million into making the G5 slightly different than doing a whole Sky/Solstice thing where 98% of the body panels are different.

      This is just as much a possibility as "badge engineering is killing GM" is one. The problem is there are so money things GM has to deal with that it is way too hard to actually know the impact of badge engineering. Maybe there is satisfaction in people who buy badge engineered vehicles that they think they bought the best looking of the bunch (of badge engineered vehicles) and therefore there is a little more happiness because of it.

      Safeway should just get rid of all name brands and sell their store brand because everyone HATES badge engineering and/or redundancy. You were brainwashed to think it is bad in cars and not groceries and that is a fact.
      • 9 Years Ago
      I had to read a review of a Saturn Sky to realize "the sky and solstice do not share any of the body panels"

      Then again, they share the same base platform, suspension, gear box and engines.

      Same thing for the G6/Malibu, same engine, same gearbox, same final, same platform.

      The real issues is too many brands, too much overlap between the brands and too many dealers walking over each other's market.

      Too many brands drove the too much sharing/too similar cars trend. Why does pontiac need a minivan? Why does saturn need an SUV? Why do we have the same trucks under GMC and Chevy?

      • 9 Years Ago
      You're right Tad, but GM also has cars that are nearly identical except for the badge on the front of the car and has done this for a very long time. I have no problem with the saab 9-3/malibu/g6 or the s40/mazda 3 from ford examples but the cobalt/g5? They hardly touched the thing. Changing the handling characteristics, looks, engines, etc. is acceptable but badge engineering isnt.
      • 8 Years Ago
      An article in Business Week01/2006 indicates what a bomb the L series has been for Saturn. Well sadly, I own one of those bombs.Each time we go for service another problem erupts which according to the service Manager at Saturn of Carlisle Pike "he has seen". He takes no responsibility for any of the occurances but we must pay the bill. First, the bells in the car go off all the time. He "has seen " that but doesn't know what it is. The seal on the oil filter breaks. We are told to pay for it because he "has seen" it happen. Today after service the battery died, you know what "he has seen" it happen. His claim is the battery was weak. There is no accounting that the service kid left the car on to listen to his country station on the radio. Today I have to replace the battery. The biggest problem is that no other garage will touch this saturn..too much liability. As soon as I give them the make and the model they decline to service the car. I am left to return to the Saturn dealer who creates more problems and takes NO responsibility for his actions and those of his service department. I have contacted him, written letters to Mr. Sutliff and all to no avail.
      This is the sixth Saturn we've had since 1995.Never had problems like this but after reading this article it makes it clear how we have been duped! Who will want to buy this car? Does it have ANY trade in value? Always the dealership pushed the idea that Saturns kept their value. What a sad story!
      • 9 Years Ago
      See I would think to Sky is aimed towards a younger generation while the Solstice is made to compete with the Miata and from my experiance, thats an older generation of people. The 2 look competely different, one with curves and another with angles so I dont know what your seeing. Again the G6 is aimed (IMO) at a younger audience then the Malibu. Just think about it, most people I see driving a Malibu are in thier 30's-40's and in a full suit going to work. I believe the G6 was made for a more "sporty, cool" factor to atract a younger crowd. SO yes they do cover 2 markets as far as I'm concerned. And I do agree that the G5 and Cobalt are maybe too similar, but as far as the other 4 cars mentioned I think GM is on the right track.
      • 9 Years Ago
      Problem with Wagoner is that he's been there since 2000 and last year his company lost $8 billion. Had it not been for an accounting gimmick, he would have continued the loss in 1Q 2006.

      What has he done for GM lately?

      Sales slid tremendously in May 2006 and if the signs of progress are in those sales figures, I'm a monkey's uncle. What was said to have been a wise business decision to throw huge sums of money into the GMT-900 program ended up looking like throwing life support money into a dying dinosaur in May. GMT-900's sales were down big time and while the Cadillac Escalator showed a sales gain, it had only been recently released and it too will have shot its wad with the idiots who were going to buy one having done so in a few months.

      LaCrosse and Cobore are doing horribly despite having been supposedly part of Wagoner's recovery plan. G6 is setting no sales records (except maybe beating its own mediocre results). Lucerne looks to be a success until you find that its first year sales couldn't hold a candle to the car it replaces when it was a similar new car.

      Cadillac is tanking just as we were told Cadillac was in a new era.

      Overall, Wagoner and Putz will have to cut more than $7 billion to cover the sales dive that is happening at GM. And wait until Putz and Company get nervous enough to start throwing money into new sales gimmicks to move crap no one would buy at value pricing levels.

      Wagoner better find another $2 billion to cut because the Titanic will sink regardless of whether he pats himself on the back now or tomorrow. He hasn't gotten the job done and his weakness in only having the balls to do the hard stuff since last year shows he is the wrong man at the wrong time for GM to save it.

      Fire Putz and Wagoner! The dynamic duo that will sink GM continues their merriment at the expense of the stockholders!
      • 9 Years Ago
      "But then again, Toyota doesn't need an explanation."

      No, they need cash from their gov't for decades, cash from multiple U.S. governments (both our states with tax breaks for factories and our federal gov't, without them the Prius would not make money, at least here in the states) and Terrel Owens types by the names of Nader, Moore and the hundreds of thier wannabes to beat GM up from the inside out. That's all Toyota needed.
      • 9 Years Ago
      I don't see how they can cut $7 billion by the end of this year when the restructering is far from over. Even with that, plus the $1 billion trimmed from healthcare doesn't seem to be enough to put GM in the black, esp. when they dumped GMAC which had been doing well (but hurt by the company's overall credit).

      It's a shame they're not killing off any brands. To me the badgineering shows there are some redundant niches in each brand. Why need a G5 when you have a Cobalt? Sky if you have a Solstice? G6 when you have the Chevy Malibu? Why do you need a separate sports brand with Pontiac when you can just have a sports variant Chevy? For example, what would a G5 offer that a Cobalt SS wouldn't? They need to cut down on how many different models they have--it's what Carlos Ghosn did for Nissan that helped bring them out of the red.
      • 9 Years Ago
      "Therein lies the whole problem with your needlessly lengthy post."

      Needlessly lengthy? You still don't get it so it must not have been long enough. So P&G doesn't pay for advertising all 3 laundry brands? All new commercials for each?

      "It does cost money to make two different skins of the same car."

      Yes, but it is nominal. It is no different than having an SLE Envoy and an SLT Envoy where the one has a little different trim inside and cladding on the outside and maybe a honey-comb grille. They do such minor changes for the same model different sub-model all the time.

      "Then doubling marketing costs to advertise both cars,"

      First of all, have you ever seen a commercial which states "brought to you by your local Pontiac dealers"? Second, it isn't double. If the Cobalt has been around for a couple years there is 2 years less advertising.

      "double the sales personnel to pitch each car at respective dealerships..."

      How does this have anything to do with GM? Don't sales personnel get paid by how many they sell? This isn't Best Buy. PLUS the dealers asked for this vehicle.

      "it goes on and on."

      Yes, in your head I'm sure it does.

      "If you think 150k Cobalts and 50k G5s = 200k Cobalts, you don't have a clue what GM's problem is."

      I was giving a worst case. I'm sure they will net more car sales than just with the Cobalt.

      "Because it increases costs without any benefit to buyers except a nominal styling difference,"

      Isn't there a great aftermarket of taillights (like Alteeza), wheels, ground effects etc? Why isn't it in the realm of possibility that a "sportier" or semi-BMW grilled Cobalt would be just what some people would want?

      I think killing the EV-1 hurt GM more than creating the G5 or the Bravada or the Ranier or the 9-7X. I think the UAW is killing GM more than the G5. I think not offering more upscale features in rental cars for years is killing GM. I know a bunch of people that either purposely rented a car they were interested in or rented a vehicle and would never buy one because they assumed the rental vehicle is all there was to it. There are a bunch of things killing GM but badge engineering is not one of them.
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