GM Memo Outlines Comeback Challenges

[Variance]

GM Memo Outlines Comeback Challenges

Where General Motors Corp. once boasted of its size and strength in the U.S. market, GM has now turned an increasingly critical eye on the weaknesses that threaten its fledgling turnaround.

In an internal planning document obtained by The Detroit News, GM's global research unit takes an unusually candid and harsh look at the automaker's declining position and vulnerabilities in its home market.

The confidential study prepared for GM's top management describes the company as "big but outdated," and warns that "our advantages of size and economies of scale are eroding." It also declares that "lack of flexibility is GM's chief disadvantage."

And the document -- created by GM's influential Global Market and Industry Analysis division and marked confidential -- confirms what industry observers have said is the automaker's central challenge in trying to halt a decades-long slide in the U.S. market share.

The Detroit News

[sciguy_0504]

I don't know about anybody else but I have a problem with this being leaked to the media.

[Flybrian]

But let's be honest. We all know this.

[Croc]

I don't know about anybody else but I have a problem with this being leaked to the media.

I kinda thought the same thing...but this is The Detroit News. Only in Detroit have I seen something like "GM Cancels Minivans" treated as front-page news with the biggest (or 2nd biggest) headline on the page. Like this isn't really news IMO yet it's being treated like paparazzi fodder

[Robert Hall]

But let's be honest. We all know this.

Yes, pretty much Captain Obvious material..

[gm4life]

Yup we all knew this... Doh.

[Flybrian]

I kinda thought the same thing...but this is The Detroit News. Only in Detroit have I seen something like "GM Cancels Minivans" treated as front-page news with the biggest (or 2nd biggest) headline on the page. Like this isn't really news IMO yet it's being treated like paparazzi fodder

Well, its beats "Paris Hilton Flashes Photogs" as if someone hasn't seem them yet.

[Variance]

Did I do bad?

Well, isn't it reassuring to know that GM knows it, too?

[sciguy_0504]

Did I do bad?

Well, isn't it reassuring to know that GM knows it, too?

Nothing's wrong on your end, Mr. Reporter.

[regfootball]

i'm so fking tired about the whole 'these (insert regional group here) prima donnas won't buy GM cars'. It's true, sure but it makes it sound like those who do still buy and love GM cars are fking dogsh1t. Last I checked, God didn't send Moses to Orange County or upstate NY.

[Croc]

Well, its beats "Paris Hilton Flashes Photogs" as if someone hasn't seem them yet.

That's not front-page news either...

[AxelTheRed]

Well this is a big ol' "duh".

[4gm]

The article talks about how GM doesn't do that well in the South, West and with younger generations. What does GM offer that would appeal to these people?

Exactly. GM's entry level cars have all fallen short of the competition. GM basically sold the same Cavalier and Sunfire for God knows how long and the Ion was ugly from the get-go and needed more time in development before it's release.

You can't ignore your bread and butter segments then wonder why you're losing market share. Duh!!

[CARBIZ]

True about the Cavalier, but that was oh so two years ago. We can argue all day about the interior plastics, etc., but the Cobalt is a quantum leap over the Cavalier. Could it have been better? Undoubtedly, but then so could a Bentley! I agree that the Cobalt should have come out two or three years earlier; in fact, I heard that there was a new Cavalier replacement scheduled for 2003 but Lutz hated it, so we got the refresh in '03 and the Cobalt two years later.

The trouble is that with this ever changing market GM will never again be all things to all people. It can only hope to do very well in most markets. I believe the Cobalt is quite competitive in its market. Right now in the small car market, there is quite a mix bag. The Corolla is ancient. The Mazda 3 is in need of a refresh. The Sentra is bland. The Caliber is getting poor reviews and isn't really a "car" anyway. The Civic is a good car, but has turned off some die-hard fans for being too far "out there."

The real test will be whether GM lets the Cobalt rot for another 3 or 4 years before being replaced. It should get a major refresh next year and then be "all new" by 2009 or 2010, at the latest.

[Robert Hall]

The Caliber is getting poor reviews and isn't really a "car" anyway.

??? It's a five door hatchback like the Mazda3 or Focus...it's definitely a car..

[Flybrian]

??? It's a five door hatchback like the Mazda3 or Focus...it's definitely a car..

Its not a 'car' in the sense of a sedan, which is obviously the most popular style of car in the US.

I understand what CARBIZ is getting at, that the Caliber suffers when people come into a Dodge dealership looking for a compact Neon but instead find a small-sized wagon. Some people just want a car. Remember also that the Magnum was supposed to supplant the Intrepid completely before dealers balked. Imagine what a poor decision that would've been. Also, take into account the Caliber is about 400lbs heavier than the Neon was and gets worse fuel economy.

[Robert Hall]

Its not a 'car' in the sense of a sedan, which is obviously the most popular style of car in the US.

I understand what CARBIZ is getting at, that the Caliber suffers when people come into a Dodge dealership looking for a compact Neon but instead find a small-sized wagon. Some people just want a car. Remember also that the Magnum was supposed to supplant the Intrepid completely before dealers balked. Imagine what a poor decision that would've been. Also, take into account the Caliber is about 400lbs heavier than the Neon was and gets worse fuel economy.

Ah, he meant to say 'sedan' and not car... hatchbacks are cars too, certainly more practical in a compact than a sedan with a tiny trunk...

[CARBIZ]

Fly makes my point. I've already had Dodge fans flock into our show room to buy the Cobalt BECAUSE they hated the Caliber. I am talking Neon owners who actually like their Neon and want to buy a Dodge but don't like the current styling trend at Chrysler. I like the Caliber, but I can see where die hard car (read: older) buyers won't like its chiseled, truck-like appearance. The Aspen is an atrocity, IMO, but many loyal Dodge fans don't "get" the Caliber.

Funny thing is, 5 or 10 years ago Chrysler was at the cutting edge of design. Many of their vehicles (last generation Grand Cherokee, the original LH sedans, for example) were both cutting edge and attractive. More recent iterations, such as the 300C, while revered by some, are a little too cutting edge for many loyalists. I think perhaps Chrysler is trying too hard.

Somewhere between what Chrysler is building and what GM has been building is a compromise that will sell 400k units.

[4gm]

The Cobalt, by most accounts, is competitive with it's class. It's not class leading nor is it bottom of the barrel. As late as earlier this decade it would have been unthinkable that GM would make something competitive in such a crowded segment. It really is quite an accomplishment. What GM needed to do, and didn't, was give the Cobalt a stylish design to bring in buyers who might not consider a GM product. Since then GM has found the power of great design. So hopefully the next Cobalt will be more stylish and less Japanese-generic.

[regfootball]

Its not a 'car' in the sense of a sedan, which is obviously the most popular style of car in the US.

I understand what CARBIZ is getting at, that the Caliber suffers when people come into a Dodge dealership looking for a compact Neon but instead find a small-sized wagon. Some people just want a car. Remember also that the Magnum was supposed to supplant the Intrepid completely before dealers balked. Imagine what a poor decision that would've been. Also, take into account the Caliber is about 400lbs heavier than the Neon was and gets worse fuel economy.

yeah but no one wants a little pile like a Neon or Crapalier these days. People want larger compacts with better crash safety and chair high seats. Jettas, new Sentras, etc. that's the size class compacts has evolved to. $h!boxes like the Yaris and Fit have come in to fill the small compact class.

The Caliber is a better proposition for DCX. They would be better of rebadging the new Lancers if they want a sedan in their showrooms soon.

Edited December 24, 2006 by regfootball

[regfootball]

The Cobalt, by most accounts, is competitive with it's class. It's not class leading nor is it bottom of the barrel. As late as earlier this decade it would have been unthinkable that GM would make something competitive in such a crowded segment. It really is quite an accomplishment. What GM needed to do, and didn't, was give the Cobalt a stylish design to bring in buyers who might not consider a GM product. Since then GM has found the power of great design. So hopefully the next Cobalt will be more stylish and less Japanese-generic.

People who dismiss the Cobalt as uncompetitive have not driven one.