With great fanfare, General Motors Co. (NYSE: GM) announced it was spending $500 million developing the Chevrolet Cruze, a so-called next generation compact car. Investors, who have seen the value of GM's stock slip 60 percent this year, could not have cared less. Shares of the company, which for now is the largest automaker, closed down for the day.Granted one car is not going to revive General Motors' fortunes, but the Chevrolet Cruze clearly is a step in the right direction. For one thing, it's got a nice design though it certainly did not blow me away. The automaker clearly is trying to build on the popularity of the Chevrolet Cobalt whose sales are up 16 percent year to date. It aso underscores how General Motors is trying to be more efficient.
"The Chevrolet Cruze was designed and engineered by our global teams in Europe and Asia Pacific and will be manufactured in those regions in addition to the assembly plant here in Lordstown, Ohio," said Chief Executive Rick Wagoner in a press release. "Our goal for the Chevrolet Cruze is to lead in fuel economy in this very competitive car segment.
But it's also taking a gamble here.
As the Wall Street Journal points out, "The auto maker believes growing demand for nicer, well-equipped small cars coupled with a dramatic redesign for the Cruze will be enough to command sticker prices well beyond the $15,000 base price of a compact Chevrolet Cobalt."
For Wagoner to keep his job, he's going to have to sell lots of them along with the company's pick-ups and SUVs, which the company and consumers are less enthused about.
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Reader Comments (Page 1 of 1)
8-21-2008 @ 6:37PM
Outta Work said...
"The Chevrolet Cruze was 'designed and engineered' by our global teams in Europe and Asia Pacific and will be 'manufactured' in those regions..." said Chief Executive Rick Wagoner.
Enough said!!!
Then let 'Europe & Asia' buy that car since GM outsourced the work to them. Try hiring American Workers, instead of laying us off. Maybe we'll have the $$$ to buy a new car from GM.
8-21-2008 @ 8:04PM
Geg Fox said...
Well...boo, hoo to Outta Work. And exactly WHO put you there? Maybe you, your union, your outrageous demands? Get a real job...and th rest of us will be purchasing cars made in Japan and elsewhere...take that to your bank...or unemployment office!!!!!!!!
8-21-2008 @ 8:38PM
margaret mckee said...
no interest in g. m.'s new model? just what is really soaring? all stocks seem to be questionable, and i believe this new model will be a huge success. we are in the middle of short money, and it is a brave co. that puts out new ideas at this time. my best wishes and i hope all goes well. i have some of gm's stock, and i am waiting for this co. to turn around............and it just may do it.
8-21-2008 @ 10:07PM
Tom said...
I read somewhere that GM makes around 17 models of cars that run on natural gas.....but none are marketed in the US....We also have a 60 year supply of natural gas in proven reserves....Russia is contracted to buy all Libyan natural gas production for the next 30 years and is negotiating to establish NG filling stations for cars throughout western Europe....My point is this....Why does our car manufacturers only respond to what others have done instead of taking the lead?
8-22-2008 @ 8:08AM
Gumby said...
Jon
You really took the pains not to mention that Cruzes will get over 40 mpg.... a yawner, eh?