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Oracle of Delphi

GM can only wonder what might have been

4 posts in this topic

Jason Stein

July 7, 2008 06:01 CET

Should Rick Wagoner have spent a little more time in Europe?

Four years ago, in a sun-drenched stretch of the French countryside, General Motors chose a gorgeous setting near Fayence to unveil its future strategy to the world's journalists.

GM's PR folks called it a Global Product Seminar, but Europe was clearly on everyone's mind.

There were new Corsas, new Astras, new diesels and new plans for GM to stake its claim as an international powerhouse.

A barrel of oil was under $40. Gasoline was about $2.00 a gallon. Full-size trucks and SUVs were delivering barrels of cash.

Would North America need the small stuff? Nah. Not invented in America. Not necessary in America, Wagoner's team seemed to say.

Whoops!

Hindsight is better at $4.00 a gallon.

Last week, sales of new cars and trucks in America plunged to their lowest level in more than a decade. Car companies (read: GM) cannot meet the surging demand for those pint-sized European cars that are small and fuel-efficient.

The downturn is drastic: GM is burning cash at an alarming rate; its shares are at a level not seen since the 1950s; and its market capitalization has dropped to $6 billion -- or less than Starbucks.

As the French say: Mauvais.

Four years later, it's obvious GM didn't spend enough time driving around the French countryside.

"What if ..." was never part of the equation.

European fuel prices have always been the stuff of legend in America. But long ago European carmakers looked at their product portfolio and asked a simple question: Is the car too big?

In America it was never big enough.

GM Europe has figured out a formula to make small cars and make money. But something got lost in the overseas connection.

It's simple: GM is not offering what Americans want because it misread its domestic market and didn't listen to its brethren which had the answer in the house.

Yes, the Astra and Corsa are coming -- but two years after Toyota's Yaris and Honda's Jazz. Maybe it would have made sense to follow the world's most profitable carmaker by preparing for doomsday a little earlier.

You know, just in case.

Link: http://www.autonews.com/article/20080707/A...paign_id=alerts

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Those who can do and those who can't write about it.

If GM 4 years ago dumped all the large trucks and SUV's the shareholders and press would have complained then for not selling what the market wanted.

Out of the top compnies only Honda has stayed with small fuel efficent cars. They have forgone the easy profits and are in shape to reap rewards today for the price they have paid over the past few years.

Even Toyota now has some house cleaning to do and few have bashed them on all the money they spent on the large trucks they just got into place when gas and oil spiked up.

GM's only sin is that many of the small cars they built overseas are not workable for the American market like the new plaforms are. GMs

move to the world platform concept is about 5 years behind. As it is they are not the only one either.

Edited by hyperv6
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Those who can do and those who can't write about it.

If GM 4 years ago dumped all the large trucks and SUV's the shareholders and press would have complained then for not selling what the market wanted.

Out of the top compnies only Honda has stayed with small fuel efficent cars. They have forgone the easy profits and are in shape to reap rewards today for the price they have paid over the past few years.

Even Toyota now has some house cleaning to do and few have bashed them on all the money they spent on the large trucks they just got into place when gas and oil spiked up.

GM's only sin is that many of the small cars they built overseas are not workable for the American market like the new plaforms are. GMs

move to the world platform concept is about 5 years behind. As it is they are not the only one either.

Noone said dump big trucks...making Euro-cars that would pass US emissions and safety (just like VW, MB, BMW are now) isn't some crazy, left-field notion.

GM left itself exposed--now we're all going to pay the price.

But it's OK because other companies were just as stupid? C'mon.

The difference between Toyota and GM right now is that Toyota can afford its mistakes.

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Noone said dump big trucks...making Euro-cars that would pass US emissions and safety (just like VW, MB, BMW are now) isn't some crazy, left-field notion.

GM left itself exposed--now we're all going to pay the price.

But it's OK because other companies were just as stupid? C'mon.

The difference between Toyota and GM right now is that Toyota can afford its mistakes.

:yes:

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