"Controlled bankruptcy" for GM

[unixronin]

So says the New York Times.

Under a plan being worked out by the administration, G.M. would file for bankruptcy, according to people briefed on the matter.  It would then use a sale authorized under Section 363 of the bankruptcy code to quickly sell off the desirable assets to a new company financed by the government.  These good pieces might include Cadillac and Chevrolet, as well as assets the company needs to run the business.

Less desirable assets, brands like Hummer and underperforming factories, would be left in the old company.

Proceeds from the sale, including stock in the new company, would be given to the old G.M., helping to settle claims.

The part of this I’m unclear about is which part ends up still being called GM.

Comments

[unixronin.livejournal.com]

These, I think, are indeed the real problems of the Detroit auto industry. They build inferior quality vehicles, usually with poor reliability and engines with lousy volumetric efficiency, incorporating no technological innovation that they aren't forced into except on the "halo" models, spending more money on tarting them up with cheap plastic trim variations for each model year than on actually improving the platform. Then they take the basic model, do a little badge engineering on it, and sell it under four or five different brands, relying on brand loyalty and exhortations to "Buy American!" to keep people buying cars that simply cannot compete on a level playing field. And then on top of that, instead of just having a list of standard features and a list of options, they make the buyer play the confusing option-matrix game.

For example, looking at my 1991 Z/28 Camaro, the first car I bought new: There were two engines available, a 5.0-liter V8 or a 5.7-liter V8, both port fuel injected. There were two transmissions available, a five-speed manual or a four-speed automatic. But if you bought it with the 5.0L, you HAD to get the five-speed manual, and if you bought it with the 5.7L, you HAD to get the four-speed automatic. Disc front and drum rear brakes — on a purportedly performance car, in 1991! — were standard; four-wheel discs were available as an option, and a heavy-duty rear axle was available as an option, but you couldn't have both on the same car. There was an overhead center console available as an option on the Camaro (though it didn't offer much beyond better map lights), but you could only order it if you got the Berlinetta trim package; you could not order it for a Z/28. Audio options included radio only, radio/CD, radio/CD/tape, and radio/CD-changer; but if memory serves, you could only order the CD changer sound system in a Berlinetta. It's completely nuts; it forces the discriminating buyer to settle for something close to what they actually wanted.

The badge engineering is stupid, too. If a single company is to have multiple brands, the differing brands should be different cars, not the same car with a different arrangement of fake chrome and a different hood badge. No two divisions of the same auto company should EVER be selling the same car, IMHO. Sharing the underlying platform across divisions is one thing; but the resulting cars should differ in more than the trim, the paint color, and the seat upholstery. Using GM as an example, sure, have a shared Big Truck platform; let GMC build and sell a serious working truck on it, let Chevrolet build an urban-macho SUV on it. You want the SUV, shop at the Chevrolet dealer; you want a working truck, shop at GMC. But fer crissakes Cadillac shouldn't be pretending to build a luxury TRUCK at all. (Then again, Cadillac has been pretending to build luxury for forty or fifty years, so why change now?)