Thursday, March 17, 2005

General Motors -- Time to Downsize

I'm not one for encouraging anything that might cause people to lose their jobs, but it's time for GM to go on a diet.

They're predicting a negative cashflow of about 2 billion dollars, per the USA Today, which also reports that $2000 of EVERY VEHICLE goes toward healthcare expenses.

The problem with GM is that for years they've been producing numerous model lines with little to distinguish them except questionable reliability and cheap looks and feel. The one brand that they managed to make some headway with, Saturn, was undone by its seeming unwillingness to update the style of its vehicles. Its reliability slipped, as did GM's apparent desire to maintain it, and now it's just another nameplate for the company.

It's time for GM to consolidate its model lines and its models from the reported 80 to a much lower (and more manageable) number. They should take a lesson from their Japanese competitors and reduce the lines down a few nameplates with distinguishing traits (entry level, middle of the road, luxury for example), and concentrate on making cars that people want to buy because they're good cars, not because they have hefty discounts or favorable financing. A greater focus on quality (which is all over the map, per Consumer Reports) wouldn't hurt, as would some nice looking entry level models that rope in young buyers and keep them buying GMs as they get older.

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