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post #1 of 5 (permalink) Old 03-07-2007, 11:23 PM Thread Starter
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Lutz: Market threatens to kill one of Big Three

From the Detroit Insider:

Lutz: Market threatens to kill one of Big Three

GM exec says automaker in best position to survive
Christine Tierney and Bill Vlasic / The Detroit News

GENEVA -- Intense competition and growing overcapacity could threaten the existence of one of Detroit's Big Three automakers, General Motors Corp. Vice Chairman Bob Lutz said Tuesday.

While Lutz dodged questions about GM's interest in buying the Chrysler Group, he said market conditions are conspiring to eliminate one Detroit automaker down the road.

"If you project out present trends, you can only come to the conclusion that it's going to be an extremely difficult environment," Lutz said in an interview at the Geneva auto show.

But Lutz made it clear that GM, in his opinion, is more likely to survive than Chrysler or Ford Motor Co. "Right now, we're in the best position," he said. "We're approaching the end of the beginning of the transformation of GM."

Analyst Bradley Rubin of BMP Paribas in New York agreed a shakeout is likely. "It's true. It is confusing. There are a lot of products out there," he said.

After losing $10.6 billion in 2005, GM embarked on a sweeping turnaround plan that included cutting 30,000 jobs, selling off assets to raise cash and launching a blitz of new products. Ford and Chrysler are undergoing major restructurings as well.

But making money consistently in their home market remains an elusive goal for GM, Ford and Chrysler.

"We cannot, as an American auto industry, survive long-term with the legacy cost burden that we've gotten," Lutz said. The rising cost of pensions and health care for employees and retirees is a "burden" that could sink one of the traditional Big Three, he said.

"In today's fiercely competitive environment, where every bit of value in the car counts, you cannot prevail in this business if you have a $2,000 cost disadvantage versus your closest competitors."
(Does that mean Lutz and his cronies will lose their pensions and health care too !!!)

Lutz declined Tuesday to discuss one of the hottest topics in the industry -- the proposed sale of Chrysler by DaimlerChrysler AG.
Senior executives at GM and DaimlerChrysler have held talks since December about GM's interest in acquiring Chrysler, say people familiar with the discussions.

While Lutz would not address the possibility of a GM-Chrysler deal, he contrasted the benefits of a domestic auto merger with GM's rejection last year of an alliance with foreign rivals Renault SA and Nissan Motor Co.
"Generically, synergies are easier to get in the same geography than across geographies," he said. "That was the problem with Renault-Nissan. What sane auto company would sign up for that?"

Like Lutz, GM Chairman Rick Wagoner would not comment Tuesday on GM's interest in Chrysler. "There's nothing we want to say about that," Wagoner told reporters at the Geneva show.

In an interview later, Wagoner stressed that GM would never do a deal simply to stay ahead of Japan's Toyota Motor Corp. as the No. 1 global automaker.
"That wouldn't be the motivation for any alliance," he said. "But we like to win and we'll keep fighting for it (the No. 1 position)."
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post #2 of 5 (permalink) Old 03-08-2007, 02:06 AM
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post #3 of 5 (permalink) Old 03-11-2007, 06:06 PM Thread Starter
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Yeah I hope Lutz doesn't get too optimistic. GM is not out of the woods by any stretch of the imagination. GM is setup like Ford and Chrysler and that is to make most of it's profits off of trucks and truck-based suv's.

I'm guessing Ford too at this point.
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post #4 of 5 (permalink) Old 03-11-2007, 06:14 PM
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Ford or Dodge to close to call.
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post #5 of 5 (permalink) Old 03-11-2007, 09:18 PM
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Id say ford,, but only on the account of, if Benz, let chrysler die now, they would loose billions,, , and I dont think they will let that happen
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