GM Exits Bankruptcy as the "New GM"
GM has emerged from bankruptcy, and the "New GM's" new CEO, Fritz Henderson, is promising that "Business as usual is over at GM." The meaner, leaner company will be "listening to customers, responding to consumer and market trends, and empowering the people closest to the customer to make the decisions." The automaker is launching a "Tell Fritz" Web site to allow owners and the public to share their concerns with senior management.
The new General Motors Company's current product line consists of Chevrolet, GMC, Buick and Cadillac vehicles. The majority owners of the new GM are the American and Canadian governments, which hold 72.5 percent.
Bob Lutz, a legendary industry executive who had planned to retire from GM, is now coming back as a vice chairman responsible for creative elements of products, marketing and customer relationships. The environment and fuel-efficiency are a priority for any new product development.
The old GM remains in bankruptcy. Brands (Saturn, Hummer, Saab, Pontiac), some factories and other operations will be liquidated over the next few years. GM has already said it will close 1,100 U.S. dealerships and intends to reduce the number of dealerships to as few as 3,600 by 2010. Some dealerships will shutter their sales department but maintain their service department. The company will also cut U.S. salaried employment by 20 percent, or 6,150 positions, by the end of 2009, and will continue to make major changes in the structure of the new company. Consumers with product liability lawsuits against the old GM will have little resource.
What that means for many consumers is:
- Owners of the liquidated brands will have to go to a sister brand for service or warranty work, but all warranties will be honored.
- Potentially longer distance to travel to buy or service a GM vehicle
- Stock in the old GM (now called "Motor Liquidation Company") is worthless. GM hopes to issue a public offering next year.
(See Bankrupt Brands and Dead Dealerships for more)
The process of shopping for a new car may also take a different turn as GM explores new ways to reach customers. GM is in the process of negotiating a partnership with eBay. If it flies, dealers will conduct a trial run, selling cars to consumers in California through eBay auctions and "Buy It Now" transactions.
Below are some tips for buying and servicing your car in the new environment:
When closing a car deal, expect to be given a hard sell for the extended warranty and other back-end products. If you want an extended warranty, make sure you get a factory-backed warranty that can be used at any franchised dealership, and negotiate for your best price. You can check the terms of the standard warranty by looking up your car and going to the "Reviews & Specs" section and looking for the left-hand link to "Standard Warranty."
If your local GM dealership closes, you will need to find a new place to get your car serviced. Here's a dealer locator tool. We recommend that you keep your eye on your owner's manual (see here to find it online) and stay on top of regularly scheduled maintenance. Remember, if you just show up and tell them how many miles are on your car, you are likely to be sold a lot of extra (or early) work. Instead, visit our maintenance section which indicates when the work should performed and how much it should cost.
When you need service, it's best to call ahead to schedule the work required with a service advisor. Ask if a shuttle will be available to take you home or if you can wait in the lounge while the work is performed. Many dealerships' waiting areas now offer wireless Internet.
If you have a favorite service advisor or technician, you might check with them to see if they are being transferred to another local dealership. Finally, if your favorite dealership has closed and the nearest one is now a real hike, some routine maintenance (oil changes and tire rotation) can be performed at an independent garage without voiding the warranty, but check the fine print to confirm this before you go. Be sure to keep your receipts to prove that the work was done on time.