Comeback Story for GM?
No sector is held up more often as the shining example of what is wrong with American industry than the automobile business. And the poster child for this much-maligned group is usually General Motors. With the recent news on the economy and Toyota’s grabbing a share of the title “The World’s Largest Car Company,” betting against GM seems about as complicated as betting that the sun will rise in the east every morning. But GM may in the progress of taking a detour in it’s long-predicted drive into oblivion.
CEO Rick Wagoner has made significant strides in improving GM’s historically uncompetitive cost position. He also has made great strides in breaking the automaker’s dependence on incentives to move inventory. While maintaining market share, revenue per vehicle has climbed over $1,400 in the last year – due mainly to much greater discipline in the use of incentives.
These are impressive accomplishments but the one which may be the key to GM’s comeback is — innovation. That’s right folks, I just used the word “innovation” and the name of an American car company in the same sentence. Give credit where credit is due. GM has already rolled out a series of acclaimed new models including Motor Trend’s2008 Car of the Year – the Cadillac CTS. What’s in store for the future? The stylish, plug-in hybrid Chevrolet Volt which is designed to go as far as forty miles before requiring even a drop of gas.
While GM still has monumental challenges in front of them, their commitment to innovative products is already starting to pay dividends. And should Wagoner succeed in turning the company around, it will be his commitment to innovation during the toughest of times that will lead the way.
3 comments so far
Leave a reply
I’ve only ever owned GM cars, so I’m rooting for them GM big time. On the other hand, I’m seriously considering buy foreign next time I’m in the market. My state is the country’s 6th largest auto producer and by 2011 will be 3rd behind only Michigan and Ohio, so whichever car I get will likely be assembled nearby.
I’m eagerly awaiting the Volt and hope that it can be made an assembly line car within 3 years, though that’s probably wishful thinking.
I’ve never owned a GM vehicle – I do however have a Ford. I too am rooting for them. The reason that I chose them for a story on innovation is that the public perception of them seems to be so negative. If a company like that can overcome these perceptions through innovation and exciting new products, then the extension to companies that are viewed much more positively is pretty straightforward.
I couldn’t agree more. I like GM, but have no problem admitting Ford, Toyota, Honda, and others are also great automakers. But as I sort of hinted at, cars are made from globally sourced parts in a number of different places.
Honda’s building a new plant here in Indiana. Toyota already has one. My car was assembled in a nearby state, but certainly some parts are from Mexico and other countries.
I root for innovation in general.