GM in trouble? Again? Key Markets, Lack of New Vehicles Could Spell Doom
Tim Esterdahl | Jul 17, 2013 | Comments 6
The recently rescued General Motors is falling behind in key markets and a lack of new products is causing some analysts to wonder if the automaker is once again in trouble. While speculation is just speculation, there is some truth behind them.
Could GM be in trouble yet again? Some analysts are speculating that very thing.
Nobody can doubt that GM has been facing a tough road to recovery. The recession and bailout cost them market share, valuable research and development time and bestowed the less desirable “Government Motors” moniker on their brand. One does wonder if the bailout just bought them time or if GM really is in trouble.
According to a story on CNN Money, GM is facing significant obstacles. These obstacles include the Chinese Government considering a plan to limit automobile sales as the country struggles to clean up its air. This is bad for GM with sales in China reaching a record 2.8 million vehicles in 2012. Throw in terrible sales in Europe and the market for GM products has certainly contracted.
Also causing issues are executives running for the door. The high profile departure/firing(?) recently of North American Head of Manufacturing Diana Trembley made news and had analysts shaking their heads. She was replaced with a GM lifer who was head of global quality. Global quality is more of an office type job where manufacturing is more “front-line” orientated. This departure is certainly not ideal when GM is struggling to assure successful launches of their few, new vehicles. They have recently brought in retired employees to make sure the launches were smooth. Not really good business.
Frankly, after speaking with GM employees over the past few months, it makes a LOT of sense for people to move on. The old benefits of GM like job security, pension and cheap health care are largely GONE.
Yet another obstacle is slowing EV sales. The boom of EV sales over the past few years has definitely slowed. GM recently announced incentives of up to $5k on its Chevy Volt. Cutting into the profit of these EV cars just to move product, doesn’t seem like a good plan.
Lastly, a lack of tons of new and exciting vehicles. Recently, GM made a significant climb up the JD Power Initial Quality Survey. This may lead you to believe their quality is improving, actually the survey doesn’t tell the whole truth. GM’s quality rating improved because it simply didn’t offer many new vehicles in the 2013 model year. The fact is the index rewards older vehicles that normally have all the “glitches” worked out. GM doesn’t have very many, so it’s quality seems high. So, the real story is GM’s lack of new vehicles and ideas. Innovation for automakers is HUGE and not making any progress with new offerings is very bad.
Check out this video about how GM beat Ford.
What will happen at GM? Who knows, but they had better develop a better plan.
What do you think? Is GM on a bad course?
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Filed Under: Auto News
Interesting view along with his white spitball hanging on his lip. I’m not a true believer in new version has a lot of bugs and later on everything is great. The 06 Silverado I had was out in it’s 3rd year and all the issues I had along with 11x replacing a headliner tells the real story. On a separate note it’s good to see my son in law trade his Silverado in for a new 2013 Tundra SR5 4×4.
Yep, because they never changed course after being bailed out. GM pulling retirees out to launch the updated 1/2 ton is clear evidence of this-that should be a real morale booster! To make matters worse, development of the token volt was a huge waste of money due to it being grossly overpriced-10K to 12K more than a Prius? They should have kept the H2 as that was a huge profit vehicle.
“Fool me once, shame on you; fool me twice, shame on me”.
having worked for GM for 6 long fricking years from 1990 thru 1996 somewhat in their heyday, I can honestly tell you GM has or did have way too many big wigs doing nothing. They are so corporate and full of corporate B.S. it made me sick. I once visited Detroit headquarters for some training and those people are living the high life having luncheons catered with prime rib and fresh seafood, etc. with all the trimmings just for taking classes. It served GM right to go bankrupt and in my opinion, should’ve let them rot since they caused their own issues from top down.
Personally, I think GM is making somewhat decent strides in quality and refrinements but not holding my breath and haven’t bought a GM product since 2007 so guess not too much in the loop when it comes to recent quality. I will be looking at the 2014 silverado now out soon and will test drive and see what is good and bad and go from there.
I am a Toyota fan, but I think the new 2014 GMC Sierra has better styling than the 2014 Tundra. Also, I like GM’s effort to increase gas milage of its truck by coming up with cylinder deactivation, resulting in 23 mpg compared to 20 mpg for the Tundra. I am in the market for a HD truck. If Tunda does not come up with a HD in 2015, I will consider buying a 2015 GMC Sierra 2500, which will be a redesign like the 2014 Sierra 1500.
Joe,
Real quick, cylinder deactivation has been GM’s main MPG saver for years. It has mixed reviews though. Check out a GM forum, there will no doubt be a thread on how to deactivate it.
Tim
yah, GM’s cylinder deactivation has been around a few years. Still, even a 3 mpg increase in fuel economy for most doesn’t seem like a lot, but in reality, is huge considering a 20% or so increase in fuel economy on truck is a significant improvement since trucks only get at most 20 mpg hwy vs. cars pushing 35-40. When you are talking cars 3 mpg is not much, but in trucks getting terrible gas mileage already, that is huge.
Still not convinced GM issues are gone, but might be considering one soon and seeing how it goes but will wait and ponder the new 2014 tundra as well even though the GM truck now has what I want in a 6 1/2′ bed crewmax/cab. Not a ford or dodge fan, only GM or Toyota or Hyundai.