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Re: GM shares fall below $10 for first time since 1954
I can't say that I'm all so heartbroken over GM's dismal stock values today.
They've made their product options heavy on the truck/SUV side and are now realizing how a lack of the "real" ability to adjust to market demand affects their entire operation. If GM had just as much confidence in its small & mid-sized vehicles as it does with its luxury, truck, and SUV vehicles; consumers would have been purchasing any fuel efficient model they had available.
It was apparent that GM left the "real" business of making smaller, more fuel efficient vehicles to Toyota, Honda, Hyundai, etc. b/c those vehicles were simply "less profitable" than, say a Tahoe or an Escalade. If a GMC Sierra HD can earn $10k+/vehicle, why focus on the Aveo or Cobalt as much? Why has Toyota put money into developing Scion and making the Corolla and Yaris pretty descent economy vehicles? They has Honda continued to fund the Civic, Fit, and CR-V to make them "perceivably" the best small vehicles anybody should own? These companies seem like they believe that they should be just as confident about their econo-boxes as much as they are about their flagship vehicles.
GM, Ford, Chrysler doesn't do that at all. Now that oil prices continue to soar, their small vehicles are now very important...would they have said that 3 yeas ago? No, not really. If these car companies didn't have so much legacy debt, they'd been taken over years ago...probably by foreign firms that could run them much better...or at least made better use of their perspective brands to be readily available globally in markets that could appreciate them more.
Last edited by jlt0x : 07-03-2008 at 09:42 AM.
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