Is General Motors (NYSE: GM) really getting its mojo back? GM execs spare no expense talking about how the 2008 Chevy Malibu is a better alternative to Honda (NYSE: HMC)'s new Accord and the Toyota (NYSE: TM) Camry. Is it really, or is this the same old GM line about how the American automaker is now making "world-class cars" that can compete line-for-line with the competitors? Specifically, Japanese competitors?GM's re-tooling of processes, manufacturing and design-to-manufacture reflected in the new Malibu may be enough to put it head-to-head against a perennial, reliable best seller like the Honda Accord, but in the minds of American consumers, style and dependability still are not synonymous with GM cars, regardless of the marketing-speak of the hour from Detroit. How can GM really convince customers that its offerings are really world-class and not the same unreliable junk that came out of GM's designs and manufacturing centers just six to seven years ago?
That's the challenge, and it will take more than confident talk like, "The cars and trucks GM has introduced over the last three model years or so stand alongside the best the company did in the 1950s and '60s when GM was the peak of styling and innovation," which came from analyst Joe Phillippi. That may be true, but it may take a generation of consumers being impressed by GM's re-emergence as a highly reliable auto manufacturer before the world realizes that Phillippi's statement is true.
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Reader Comments (Page 1 of 1)
12-27-2007 @ 6:09PM
Joe Cowan said...
Business is bad so let's raise prices. I actually read in a newspaper story that prices will rise soon because of higher steel costs.
It seems that the people running GM are removed from reality.
Joe Cowan
12-28-2007 @ 11:35AM
V.S. said...
Steel costs are rising because the Chinese are buying it all up, as fast as it can be produced. All companies using steels to produce "their" products will/have to raise their products' prices, not just GM. Some will announce it, some won't. The people running GM (Rick Wagoner, Bob Lutz, Fritz Henderson are class acts and their will be profits in 2008 when the new contract starts to take affect. Investors who are not buying GM stocks now while it is low will loose out on the dividends..Sorry ole' boy, seems you have an ax to grind and it will cost you in the long run. Look at things from the "investment end" and not in the past!
12-27-2007 @ 6:17PM
Gumby said...
Brian
What you do not understand is that everyone including you and me do not have the luxury to question the so called confident talk coming from GM and Ford. It is greatly besides the point about who is right or will be. As you should already know by now is that GM and Ford is on last breathes like your late parents had if they had passed away yet or not. Are we prepared to see GM and Ford go belly up as we might have been assuming it would never happen? What will become of our psyche?? Perhaps we had been so used to GM and Ford financial juggernauts like asset sales and stock manipulation? for years if not decades since that we thought that it would not matter what market share GM and Ford is enjoying. There is one variable that we can be certain of is that there is a cut off point in market share where GM and Ford will find itself unable to sustain its juggernauts any longer and suddenly like overnight declared bankruptcy. What is the cut off point? Are you willing to play game with that by keeping on writing about your skepticism about the GM and Ford slack stories? Wont it be much simpler if we just go buy their products with all the warts and feel a bit better? I have no easy answer for you.. Are you out of your mental numbness yet?
12-28-2007 @ 3:39AM
Joe said...
GM has certainly gained momentum since hitting rock bottom of around $18 in 2005. Two cars in particular, the Chevrolet Malibu and the Cadillac CTS are the first GM cars in a long time to have elicited genuine excitement from car enthusiasts. Having test driven both cars, I find that the build and ride quality are certainly competitive with their Japanese and European counterparts. GM has really gone full out with these cars, supporting their market presence with a heavy dose of marketing. GM clearly wants everybody to know that it can produce cars that rival Honda and BMW. It's far too early to say that GM has gotten its mojo back, but it certainly is trying its hardest.
My biggest concern for GM's future lies in two areas, managing debt and brand loyalty. Debt is a major concern because it may handcuff GM in continuing to be competitive throughout its product line. Looking ahead, buying out pensions was probably a good idea as it will free up cash in the future, even if it was a PR hit for GM. This will hopefully help GM become more price competitive, so that consumers will start choosing GM cars not simply because of price, but because they are competitive in other aspects like build/ride quality and reliability. The Malibu and CTS are a good start, but in order to compete with the likes of Toyota, every car must be as well thought out and executed as the Malibu and CTS. GM can ill afford more missteps like the Pontiac Aztek.
12-28-2007 @ 11:39AM
vcs745 said...
The Aztech was mostly foreign made. Good gas mileage but a dog for looks. To me it looked like the old "Gremlins" running around town but there were a few who bought them for the mileage.