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Empty Promises
Friday, April 14, 2006
Auto analyst slams GM in speech to local dealers
By JEREMIAH MCWILLIAMS, The Virginian-Pilot
© April 13, 2006
VIRGINIA BEACH " It would be nearly impossible for Hampton Roads auto dealers to miss the bad news about General Motors Corp.: factory closings, declining market share, job cuts and talk of bankruptcy. But just in case, longtime automobile analyst Maryann Keller added her two cents Wednesday.
'GM always seems like it's in a bubble, like customers are always waiting for GM to release new models,' Keller told about 200 guests from the automotive, advertising and financial industries during a luncheon at the Founders Inn. 'GM has never understood that the whole world is changing rapidly.'
Keller predicted that Pontiac and Buick, once stalwart General Motors divisions, would disappear within the next five years.
A year ago, Rick Wagoner was saying, 'Just wait until next year when the new models are out,' Keller said of the General Motors chief executive. Well, guess what? It's next year, and market share's down.
Keller has more than three decades of experience in dissecting the travails and triumphs of auto companies. She wrote 'Rude Awakening: The Rise, Fall, and Struggle for Recovery of General Motors' and 'Collision: GM, Toyota, Volkswagen and the Race to Own the 21st Century.' Keller has spoken to the Hampton Roads Automobile Dealers Association in the past and won praise from its leaders for accurately predicting skyrocketing oil prices at a previous presentation .
She is a director at Tulsa, Okla.-based auto leasing company Dollar Thrifty Automotive Group Inc. and is a former president of the automotive services unit of Priceline.com.
Never known for mincing words, Keller was true to form at the Wednesday event, which was organized by the Hampton Roads Automobile Dealers Association and sponsored in part by T he Virginian-Pilot.
Reeling off what she described as Wagoner's major failings, Keller named accounting irregularities, incentives that 'devalued brands' and cuts in capital expenditures to develop new models.'
'Thats really smart,' Keller said of the cuts. 'What do they think they're selling, insurance?'
GM actually increased spending by almost $1 billion to $7.9 billion last year after severe reductions earlier in the decade.
Enough already, said Dennis Moore, general manager at Hall Pontiac GMC Hummer in Virginia Beach.
'I've watched her over the years, and if she likes something or it's new and innovative, she's all over it,' Moore said later Wednesday afternoon. 'If you're on the bad side of her, or if she doesn't like what you're doing, look out. & It was a doomsday prophecy, and I don't think that's going to happen. I think there's going to be a restructuring, and they will get on the path to financial recovery.'
Keller has been on the attack against GM for some time. In an article that appeared in The Washington Post last June, she wrote: 'One has to wonder why it has been so hard for GM to figure out what car buyers want and then give it to them. The company has not been able to leap ahead of the competition since the early 1980s.'
Moore, however, said he believed GM has what it takes to get its house in order.
'We've got a great product, we've got the best dealer network in the world,' he said. 'There's no reason we can't succeed."
Reach Jeremiah McWilliams at (757) 446-2344 or jeremiah.mcwilliams@pilotonline.com.
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