People are starting to get optimistic about General Motors again. With good reason. The automaker is starting to pay off some of the bailout loan from the federal government and the German government for the Opel imbroglio.
The company experienced its first monthly sales gain in October, a first in almost two years. This is despite the fact that GM market share in the U.S. has dropped to a disturbing 19.7 percent last month. Only a year ago it was 22.1 percent. Why? Sales of GM’s core brands — Chevrolet, Cadillac, Buick, and GMC — have actually been quite good. It appears that they are recouping the sales losses of the eliminated brands — Saab, Hummer, Saturn and Pontiac. And new vehicles that GM has introduced — the Chevrolet Camaro, Traverse and Buick Regal — are attracting customers and receiving raves from critics.
Finally, it is not bleeding as much money any more. GM has cut costs by nearly $29 billion and it has narrowed its losses.
However, there still are some hurdles that must be overcome. First, GM must deliver on product. And one of those big product promises is the Chevrolet Volt which is expected out next year. GM needs for this car to live up to the hype. Second, there are still some management issues that must be settled. [Editors Note: One issue, the conflict between Whitacre and Henderson, has recently been resolved.]
More details on GM successes and future issues can be found at the Detroit News.
Our take? It’s still too early to tell if GM’s out of the red, both financially and permanent closure’s door. The new board, especially, and its direction, will bear close watching over the next couple of years.
What do you think of GM’s recovery?
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