The New GM: Now What?

GM Logo A new General Motors was born yesterday, shedding debt, dealers, disastrous products and I’m sure a few other alliterative entities I can’t think of right now. The new company is leaner, greener, less burdened by debt and with an even labor playing field that should — in theory — allow the automaker to compete in the toughest market it has ever seen.

So after all this cutting and shedding and contracting, what’s left? Quite a bit, really. With four brands the company will have a product portfolio of 34 nameplates. That’s a lot, but no more than Toyota, depending on how you count it. New, better stuff is in the pipeline, and it’s a good bet that even the lowball GM products — such as the Chevy Cobalt — will be replaced within the next 18 to 24 months.

Still, there’s a lot for GM to do, and I’m not just talking about consolidating management structures or reshuffling the titles on various business cards (like retaining Bob Lutz as product czar). There’s still one more huge mountain GM has to climb, one that even this new and improved company may not be able to manage: convincing people my age to buy its cars. I’m a 39-year-old white male, living in Southern California in a middle-class area. I’m married, have three kids, a nice house, and most of the other trappings of comfortable suburban living. What I do not have are any GM products in my driveway. It’s not an institutionalized bias against the company; I learned to drive in a 1973 Pontiac Grand Am, and my mom still speaks fondly of her 1976 Cadillac Seville.

Now, as someone who evaluates cars for a living, I have a different perspective on GM’s current lineup of products. I know, for example, that the Malibu is as good as a Toyota Camry or Nissan Altima, and even gives the larger Honda Accord and Hyundai Sonata a run for their money. I know that the GMC Acadia is a worthy alternative to the Honda Pilot or, especially, the Toyota Highlander, and that the Cadillac CTS is as good or better than any mid-size luxury sedan from any automaker. These cars and many other vehicles in GM’s current lineup are competitive not because of incentives or cut-rate financing, but because they’re genuinely worth the money you would spend on them.

I know that because I’ve driven them and compared them to their competitors. Yet when other people my age ask me the “what car should I buy” question, they crinkle their noses in disbelief when I say that the Chevy Such-n-such or the Buick Whatchamacallit are worth a look.

I don’t blame them  of course. After all, GM is the company that gave us the Vega in the 70s, the Citation in the 80s, the Sunfire in the 90s and the Aztek in the 00s. It’s going to take dozens of cars like the Malibu and CTS to make up for those sins, and to top it off, GM will also have to solve its longstanding reliability problems as well.

Overcoming the decades of neglect that GM has brought upon itself is going to be the biggest hurdle it must overcome if it is to woo buyers away from Toyota, Honda, Nissan and others. By and large, GM’s newest cars are better than just good enough, they’re often class leaders. Good product is a great first step, and nobody’s happier to see it than me.

Yet it’s not enough. It’s bad enough to have the Chapter 11 lodestone hanging around the company’s neck, but if that were the only problem then GM could quickly recover. It’s rebuilding confidence in the four remaining brands (well, three…let’s just let GMC wither and die, OK?) that will prove the biggest hurdle, because if there’s one thing among all others that GM has lost in its restructuring, it’s excuses.

2 Users Responded to " The New GM: Now What? "

avatar
Neal J said,  

Good question, Keith. I’m 76 and should by rights have already bought my last car. But optomist that I am, I’m wondering what new car I should buy should I buy one?

First, I’ve never been one to appreciate the new designs and styles. With no exceptions that I can think of, the new cars look like they’ve been hit from the rear by a semi or made from a painted cardboard box and mounted on a set of wheels. I’ll probably get used to them by and by, as I usually do. But it’ll take awhile.

I’m perfectly happy with my 2001 Dodge Grand Caravan Sport, but it’s getting up to 150,000 miles, well past the typical Chrysler transmission failure threshold.

But “Chrysler” who? If they couldn’t build a good car before, what evidence is there that being owned by the Union and run by the Government qualifies them to build a good car now?

And a Chevy? Hmm! I learned to drive on a 1939 Chevy, and it was my very first car–a 1942 2 door sedan. It was the last Chevy produced before the war, and the last one I ever owned. Funny, it was at the time the standard car of the whole world! Maybe that’s why they never particularly turned me on.

Sigh! Maybe I’ll just put a transmission in the comfy ol’ Dodge and let it go. Yeah, that’s it. Simplest and cheapest–oh, how I hate decisions!!

Pingback & Trackback
Leave A Reply Here

  Username [*]

  Email Address [*]

  Website

Subscribe to this post's comments

Note: Comments appear after moderation, so please don't resubmit. Thank you.

learn futures trading business catalogue site monitoring