Can GM Come Back?

[Slowrider5]

From Jim Jubak of MSN Money (about the only financial analyst I really listen to):

The auto industry is in chaos -- fortunately for General Motors.

* Gasoline above $4 a gallon in the U.S. has sent sales of trucks and SUVs plunging as drivers look for more mileage for their dollars.

* Higher steel prices have savaged profit margins.

* New competitors from India and China are about to emerge in the global market.

* And nobody knows what the future will bring -- electric cars, more hybrids, even cleaner diesels.

It's likely that the auto industry will look radically different in 2010 than it does today.

And that's what's likely to save GM. The company is bleeding market share in its home market because fewer motorists want to buy its North American product line of trucks and SUVs. And its losses are so huge that in the past couple of months the company has burned through cash at a rate of more than $1 billion a month. In the quarter ending in March, the burn rate was about $500 million a month.

But whatever its current troubles, the company isn't shut out of the future of the global auto industry. So much change is sweeping across the global marketplace, nobody -- not even Toyota Motor - - will be able to lock up the market and turn GM into a permanent also-ran. There's so much uncertainty about demand trends and developing technology that even a player as currently challenged as General Motors could grab the brass ring if it makes the right decisions on what cars to produce and what technologies to back.


And amazingly, given all the talk about the death of General Motors, the company has a better chance of grabbing that prize than almost any car company in world except for Toyota. If GM can get to 2010 with a few dollars left in its gas tank, that is.

More at link: http://articles.moneycentral.msn.com...sComeBack.aspx

[tgagneguam]

Funny, the list of competitive pressures that face GM face just about every other automaker operating in the US. Sounds like management's gonna run out of excuses.

Can GM Come Back?

Of course, it can! It has almost everything-short of talented leaders-it needs to make that happen.

I find it interesting that the author draws a similar conclusion as I do, given the grand media conspiracy working daily to bring about the destruction of The General Motors Corporation.

[WishIhadatruck]

A new direct-injection turbo four-cylinder engine is a critical element of the turnaround. The goal, according to Bob Lutz, the vice chairman in charge of product planning, is to give GM best-in-class fuel economy in every market from small to big models.

With gas prices rising this is critical. I would love to see it. Especially in small cars and hybrids where they currently are not leading for the most part.

Lets hope gas prices don't rise too much more too quickly or the market gets too much smaller or GM might not make it.

[TruckMan]

Yeah! More fear-mongering on the front page. While we're at it, let's talk about how crappy the economy is and the possibility of going to war with Iran and how stupid GM is for not bring the Beat and Cruze here immediately.

[throwback]

Sure GM can turn it around, I'm just not confident they have the leaders to do it. I look at what Mullaly is doing at Ford and I see a leader who is focused, determined and bringing a huge bureaucracy along with him.

[ericmvest]

The positives:

1. I think General Motors has its best senior management in decades.
2. The product launches over the last three years are second to none and future product appears excellent also.
3. JD Powers and the Harbour Report verifies that General Motors' quality and productivity is right up there with Toyota and Honda.
4. General Motors' pension is fully funded.
5. General Motors is handing off responsibility for hourly retiree health care benefits to the UAW.
6. General Motors series hybrid approach (Volt) appears to be superior than Hybrid Synergy Drive.
7. The Volt's development appears to be on track.
8. The Two Mode Hybrid appears better than Hybrid Synergy Drive.
9. General Motors is a leader in flex fuel vehicles.
9. General Motors appears to be the leader in fuel cells.
10. General Motors' June sales performance was better than Toyota's.
11. General Motors UAW agreement appears competitive with the transplants.
12. General Motors buyout programs are attracting enough buyouts.
13. General Motors is doing very well in practically every market except the United States.
14. General Motors design/styling is the best in decades, probably since the Bill Mithcell era.
15. General Motors has survived rough patches before. General Motors faced insolvency in 1909 and 1920 when they were bailed out by New York banks and the DuPonts, respectfully. General Motors turned itself around and thrived after these experiences.

An arguement could be made that General Motors is improving at an impressive rate and Toyota is getting worst. Toyota's recent product launches, such as the Corolla, Sequoia, and Tundra, are uninspiring and their quality and plant utilization is going south. It's not your father's Toyota anymore.

[Whitesky]

Of course. We could be just like Apple. Maybe the Volt will be the first step.

[tgagneguam]

Originally Posted by ericmvest

The positives:

1. I think General Motors has its best senior management in decades.

Of course, this is a relative comparison, ericmvest. Place GM's current management against, say, General Electric's, and it will provide some rather quick insight into how GM could be a much better run company.

[eaton53]

Originally Posted by throwback

Sure GM can turn it around, I'm just not confident they have the leaders to do it. I look at what Mullaly is doing at Ford and I see a leader who is focused, determined and bringing a huge bureaucracy along with him.

Talk about undeserved love.
When I look at Ford pretty much every product of theirs that has a GM counterpart is inferior. But they're better than Chrysler.

[camaro_freak]

Originally Posted by ericmvest

The positives:

1. I think General Motors has its best senior management in decades.

I have to disagree ENTIRELY...

Originally Posted by ericmvest

2. The product launches over the last three years are second to none and future product appears excellent also.

have you been following the news at all??? I'd hardly call three mini cuvs and one mid size car and a 40grand plug in vehicle second to none

Originally Posted by ericmvest

3. JD Powers and the Harbour Report verifies that General Motors' quality and productivity is right up there with Toyota and Honda.

took them long enough.... 'standard of the world' finally holding true again?

Originally Posted by ericmvest

4. General Motors' pension is fully funded.

yup that is good

Originally Posted by ericmvest

5. General Motors is handing off responsibility for hourly retiree health care benefits to the UAW.

that is good too!

Originally Posted by ericmvest

6. General Motors series hybrid approach (Volt) appears to be superior than Hybrid Synergy Drive.

Toyota's synergy drive is proven and has been in the marketplace for almost 10 years. VOLT isn't even out yet or been tested fully (hell the batteries aren't even finalized yet). We'll see if this holds up when the cars start to show a little age.

Originally Posted by ericmvest

7. The Volt's development appears to be on track.

I hope so for their sake

Originally Posted by ericmvest

8. The Two Mode Hybrid appears better than Hybrid Synergy Drive.

details to back this up?

Originally Posted by ericmvest

9. General Motors is a leader in flex fuel vehicles.

Great feature, but what good is this when you can't get e85 in your town?

Originally Posted by ericmvest

9. General Motors appears to be the leader in fuel cells.

remains to be seen if that goes anywhere

Originally Posted by ericmvest

10. General Motors' June sales performance was better than Toyota's.

yeah but they gave those cars away...72 month financing?

Originally Posted by ericmvest

11. General Motors UAW agreement appears competitive with the transplants.

good news

Originally Posted by ericmvest

12. General Motors buyout programs are attracting enough buyouts.

again great news

Originally Posted by ericmvest

13. General Motors is doing very well in practically every market except the United States.

pathetic, but true... especially in China

Originally Posted by ericmvest

14. General Motors design/styling is the best in decades, probably since the Bill Mithcell era.

hum... there are still PLENTY of stinkers in the lineup but Welburn and Lutz seem to finally push for design again.

Originally Posted by ericmvest

15. General Motors has survived rough patches before. General Motors faced insolvency in 1909 and 1920 when they were bailed out by New York banks and the DuPonts, respectfully. General Motors turned itself around and thrived after these experiences.

true, but this is different... gas prices are not something they can adjust for quick enough and gas prices probably aren't going to go back down.

Originally Posted by ericmvest

An arguement could be made that General Motors is improving at an impressive rate and Toyota is getting worst. Toyota's recent product launches, such as the Corolla, Sequoia, and Tundra, are uninspiring and their quality and plant utilization is going south. It's not your father's Toyota anymore.

This I totally agree with, they definitely have had their growing pains!

[camaro_freak]

Originally Posted by eaton53

Talk about undeserved love.
When I look at Ford pretty much every product of theirs that has a GM counterpart is inferior. But they're better than Chrysler.

really? Ford Escape Hybrid, Fusion, Focus, and Edge all have better counterparts at GM.... hardly!

[Ambalanche]

Camaro Freak, you left out the Camaro, that will surely be an awesome car and be very successful against it's competitors.

[Slowrider5]

Originally Posted by TruckMan

Yeah! More fear-mongering on the front page. While we're at it, let's talk about how crappy the economy is and the possibility of going to war with Iran and how stupid GM is for not bring the Beat and Cruze here immediately.

Actually, if you read the article, you'd see it's not fear-mongering at all.

[eaton53]

Originally Posted by camaro_freak

really? Ford Escape Hybrid, Focus,

The Escape and Focus are old designs that have been refreshed about 4 times... they're not superior to the VUE and Cobalt. Both VUE and Cobalt have won recent comparos while the Fords aren't even included.

Fusion

Both the Malibu and Aura are better than the Fusion... especially the class-leading Malibu.

Edge

That's about the extent of it.... it beats the Nox/Torrent easily.

So, they've got one whole vehicle that beats GM's offerings, yet they're great?

[ericmvest]

Originally Posted by camaro_freak

I have to disagree ENTIRELY...

have you been following the news at all??? I'd hardly call three mini cuvs and one mid size car and a 40grand plug in vehicle second to none

took them long enough.... 'standard of the world' finally holding true again?
yup that is good
that is good too!
Toyota's synergy drive is proven and has been in the marketplace for almost 10 years. VOLT isn't even out yet or been tested fully (hell the batteries aren't even finalized yet). We'll see if this holds up when the cars start to show a little age.

I hope so for their sake
details to back this up?
Great feature, but what good is this when you can't get e85 in your town?
remains to be seen if that goes anywhere
yeah but they gave those cars away...72 month financing?
good news
again great news
pathetic, but true... especially in China
hum... there are still PLENTY of stinkers in the lineup but Welburn and Lutz seem to finally push for design again.
true, but this is different... gas prices are not something they can adjust for quick enough and gas prices probably aren't going to go back down.
This I totally agree with, they definitely have had their growing pains!

Your critique of my post is even handed and well thought out. General Motors is finally making significant progress, but can not rest. General Motors needs to keeping improving at an increasing rate.

The improved labor contract was a major accomplishment that must have taken a lot of skill to negociate. Caterpillar had to take a very long, bitter strike with the UAW to obtain the concessions necessary for Caterpillar to be competitive. Without a competitive cost structure, General Motors was doomed. General Motors' new labor agreement should give them cost parity with the transplants. If General Motors keeps improving in all the other areas I mentioned in my post, they have the potential to turn themselves around and thrive.