Wednesday, April 30, 2008

General Motors' General Pain

About this time last year, General Motors was chalking up an 11-cent/share gain for you. This time around, GM says it lost you $5.74/share in the quarter. What happened?
GM Is blaming the shortfall on problems created with the strike at American Axle.
I believe it is more fundamental than that.

I just returned from Texas Motor Speedway in Fort Worth, where the Texas Auto Writers Associated fielded its annual Spring Challenge—this is where all the auto manufacturers are invited to bring their new toys to show and tell for the journalists who shape public perception when choosing their next automobile.

I have posted more photos from the event on my Facebook site.

But here’s my fundamental impression: When GM is building one car, slapping two different decals on it, and trying to sell against itself, it’s wasting resources.
Case in point: The Saturn Sky (foreground) and the Pontiac Solstice (with raised hood, background.)
They’re the same car…and they have limited utility, unless you’re a die-hard rag-top fan like me.

But how many other duplicate products does GM—and Ford, and Chrysler, as well as Toyota and Nissan—make that could impact sales, profits, and public perception?

Notice there are no duplicate versions of the Ford Mustang or Chevrolet Corvette...and why should there be?

I get the premise of putting a premium label on a product to appeal to a more upscale consumer. All consumers are becoming more and more savvy, and as automobiles become more complex and more expensive, are the automakers creating problems for themselves by such duplicity?

As fuel prices climb past $4/gallon—and they will—the automakers have to make a more fundamental choice: will they stake their success on building two’s and three’s of a kind, or begin to pare the choices and direct their energies (no pun intended) towards better technology and higher fuel economy?

By the way, the government’s idea of an energy policy is to require all automobiles to get at least 35-mpg by 2021.

Gadzooks, what’s the rush, fellahs?
At that rate, we’ll be all driving cars with Flintstone power…

No comments: