Monday, April 04, 2005

Lutz, Wagoner Out At GM North America

Richard Wagoner, GM's Chairman and CEO, has announced the replacement of Bob Lutz and Gary Cowger from their roles in North American operations.
Wagoner's "neck is in the noose in North America," said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Michigan. "He is saying to shareholders that North America is going to get a full-court press."
Wagoner, who has filled the Chairman and CEO role since 2000, comes from a financial background, and plans on addressing high healthcare costs, "which add about $1,525 to the cost of each vehicle sold in the U.S." Remarks that the company may have to fold a product line "may also have displeased Wagoner", according to David Healy, an analyst with New York-based Burnham Securities Inc. "Lutz retreated from those statements last week in a Denver speech," the article goes on to say.
GM's latest new cars, such as the Pontiac G6 and Buick LaCrosse, are lagging in interest compared with other new models such as Chrysler's 300 sedan, Rob Hinchliffe, an analyst with UBS Securities Inc. in New York, wrote in a March 28 report.

Seven GM models were among the ``top'' 10 spots in a UBS survey asking auto dealers which new products would be ``flops,'' Hinchliffe wrote. The LaCrosse led the list.

March was the best month so far for the G6 and LaCrosse and one of the reasons March sales beat analysts' forecasts, GM sales analyst Paul Ballew said in an April 1 conference call. GM's March U.S. sales rose 2.5 percent, the first increase this year, according to Autodata Corp.

If, as Autoguy has suggested, the problem here is that GM is coming out with bad designs and in fact has its head in the sand regarding big SUVs and trucks, no change at the top will help; these are decisions with a great deal of financial and cultural inertia. When Lutz disingenuously denies the very "phase-out" he suggested a week before, it sounds very much like the company's officers are more concerned with political spin than turning around their company.