GM’s in big trouble with collosal value eroded. Will the rescue team get this American out of troubled waters?
The restructuring includes a closure of four SUV-making North American units in Oshawa (Canada), Mexico, Moraine (US) and Wisconsin (US). Then there was a new motivation voiced over GM’s small car dreams (thank God it’s finally focussing on fuel efficiency!) with plans to unleash a second generation Chevy small car by 2010. This project is part of the new ‘Global Architecture Strategy’. There was also a reference to selling off the oil-guzzling Hummer brand. Analysts are also optimistic about the same as they believe that the move will help GM in projecting a fuel-efficient image; an urgent need.
So, will this move make a difference? Greg surely believes so as he explains, “Talking about perception, I think GM is still a very strong global brand both in Asia & US. And surely, improvement is on the cards with the change waiting to happen...” Further up the value-chain, GM is also gearing-up to redefine the ultra-competitive luxury segment & wants to produce a version of its up-market Cadillac brand based on a Saab platform in Sweden (where 10,000-11,000 workers are to be ticked off). The yet unnamed product will compete head on with the likes of Audi A4 and BMW 3 series. However, this move is questionable, as it comes at a time when a depreciating dollar has actually forced German manufacturers to shift production to US. Additionally GM, it seems is still quite content with its light truck and crossover businesses, which increased by 4% over last year. “After Toyota launched the Tundra and Honda is ready with its Pilot, the light truck market is alive in the US. To be competitive, we at GM are focusing more on quality and reliability, more as ‘fuel efficiency’ in trucks is not a major deciding factor,” added Martin. Right he might be, yet GM needs to forget that non-fuel efficiency and trucks were the real rebels responsible for the near-murder of GM.
The restructuring includes a closure of four SUV-making North American units in Oshawa (Canada), Mexico, Moraine (US) and Wisconsin (US). Then there was a new motivation voiced over GM’s small car dreams (thank God it’s finally focussing on fuel efficiency!) with plans to unleash a second generation Chevy small car by 2010. This project is part of the new ‘Global Architecture Strategy’. There was also a reference to selling off the oil-guzzling Hummer brand. Analysts are also optimistic about the same as they believe that the move will help GM in projecting a fuel-efficient image; an urgent need.
So, will this move make a difference? Greg surely believes so as he explains, “Talking about perception, I think GM is still a very strong global brand both in Asia & US. And surely, improvement is on the cards with the change waiting to happen...” Further up the value-chain, GM is also gearing-up to redefine the ultra-competitive luxury segment & wants to produce a version of its up-market Cadillac brand based on a Saab platform in Sweden (where 10,000-11,000 workers are to be ticked off). The yet unnamed product will compete head on with the likes of Audi A4 and BMW 3 series. However, this move is questionable, as it comes at a time when a depreciating dollar has actually forced German manufacturers to shift production to US. Additionally GM, it seems is still quite content with its light truck and crossover businesses, which increased by 4% over last year. “After Toyota launched the Tundra and Honda is ready with its Pilot, the light truck market is alive in the US. To be competitive, we at GM are focusing more on quality and reliability, more as ‘fuel efficiency’ in trucks is not a major deciding factor,” added Martin. Right he might be, yet GM needs to forget that non-fuel efficiency and trucks were the real rebels responsible for the near-murder of GM.
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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