GM Should Shine Next Year

The other evening on “60 Minutes,” Steve Croft hosted a fascinating report on General Motors, highlighting the company’s current struggles and its task ahead to return to greatness.

There’s been a lot of bad news about GM so far this year and it finally occurred to me that what GM is doing is purposefully making 2006 its official transition year. Put all the bad stuff into one fiscal year, then even a modest improvement in fiscal 2007 will look like a real accomplishment.

So far in 2006, GM has announced a number of plant closings, layoffs of both workers and management, and the majority sale of its highly profitable finance arm along with other non-core operations. The company is ending its corporate alliances with other automobile manufacturers and is going back to the drawing board to create new automobile designs.

In the “60 Minutes” story, Bob Lutz himself (GM’s Vice- Chairman) said that automobile companies usually design their best products when they are in crisis. I hope GM comes out with some great new vehicles and I hope they do it fast. Even if you don’t like the Chrysler 300 or Dodge Magnum, you have to give Chrysler credit for producing bold designs.

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That’s it! Bold design. GM needs it so it can generate some excitement in its vehicles again.

My mechanic (at a private garage) doesn’t recommend any American cars to his customers because he says they just aren’t screwed together as well as foreign manufacturers. He used to like German cars, but now puts them down because of their poor reliability over the last few years, particularly in the electronics department. His favorite all around brand right now is Nissan/Infinity for refinement and quality. He also recommends to customers that they buy vehicles that are made in Japan because their quality control at the factory is very stringent.

When I go to my mechanic, I always tell them that the most reliable vehicle I’ve ever owned is my GMC Sierra extended cab 4X4 pickup. Frankly, they don’t believe me. At a recent auto show, I found the Chevy Impala to be very well put together, and it’s available at an attractive price point. GM’s new line of SUVs is very refined and downright luxurious, and the Corvette and Pontiac Solstice were real hits. Bring back the Camaro and the people will come.

This year, expect a lot more bad news from GM. The company is going to try and put as much bad news into 2006 as possible so we can see the company shine next year. As long as GM makes vehicles that people want to buy and they get excited about, the company will easily be around for another 100 years no problem.