The State of General Motors: Q1

[CaMIRO]

The State of General Motors: Q1

General Motors reported its preliminary first-quarter financial results yesterday, and these were better than expected... every automotive unit improved upon financial results reported in the same period last year.

As of January 1st, 2006, the company has had one, single, product design and engineering budget. This integration is Lutz’s major task. Lutz, who measures his age in Celsius, has the experience to hone General Motors’ often disparate focus, both in its products, and in their engineering within what is a giant global company that has only recently begun to take advantage of its scale and reach. The key is to adapt the global organization to accept and empower people who are able to balance the use of global platforms and parts that are available to them, with an understanding of how to adapt these to the local markets their brands serve.

General Motors employs – directly – more than 120,000 people across the United States. It provides health-care coverage to 1.1 million employees; retirees, and dependents – more than any other company in the country. Given this responsibility, what purpose does unbridled doom and gloom serve?

Despite constant surmising about GM’s financial woes, the company raised its capital spending in 2005, and will increase it again by approximately $800 million in 2006 (to $8.7 billion).

Harbour Consulting’s 2005 survey found GM’s Oshawa, Ontario plant to be the most efficient in North America, at 15.85 labor hours per vehicle... this is all the more impressive when one considers that General Motors – unlike Toyota; Honda, and Nissan – reports all its plants to the survey. The three foreign automakers do not report statistics on their newest plants until they are up to speed. Toyota leaves out Princeton, Indiana, for instance; Honda, its Lincoln, Alabama plant.

... the March turn rate of the Chevrolet Tahoe was 19 days; of the Yukon, 16 days, and the Escalade, 7 days. What was it for the Toyota Highlander Hybrid and Lexus RX400h hybrid SUVs? 34 days.

At some point, much as AutoExtremist’s Peter DeLorenzo predicted last year, the positives of GM’s resurgence may well belie the negative press – and it will be a sad comment on the state of today’s media.

If General Motors’ products – or Ford and Chrysler’s products, for that matter – are uncompetitive, then let them sink. However, if they suffer more from perception than competence, then we all lose – particularly (and this is where Lutz’s numbers come in) when the stakes are so great.

As GM gets it together both in its product development process and in the products that process produces, it remains to be seen if our opinion leaders can forgive and forget the 1970s for long enough to take notice.

Edited April 21, 2006 by CaMIRO

[Ravenfreak13]

Wow...are we really starting to see the extremely early stages of a toyota decline?