Personally, I think GM's turnaround benchmark should be more heavily weighted on the performance of its new small and midsize cars, since historically that's the area where GM has continually trailed the competition. Their trucks and SUVs and crossovers have always been good, even if the interior plastics weren't the best. However, cars such as the Honda Civic have been out for how long now, and still GM lags far behind in that area. So for me, my benchmark will be based on how good cars like the new Chevy Cruze and Aveo and Spark will be. If those cars all come up lacking, then GM really hasn't learned anything. I'm hoping they'll be great though.

GM's biggest problem is convincing car buyers that their products are now worthy of consideration. They're fighting decades of poor quality perception/reality from the auto public.

Maybe in this new age of "instant info" they can pull it off. I hope so.

I think it's a two part question. Can GM make world class vehicles people want to buy? I'll take your word for the answer being yes, and you have provided what looks to be a good example.

But the turnaround hinges on increased revenues and reduced costs. Assuming they have the costs under control and competitive with Toyota/Hyundai/Honda (which is a BIG assumption) I'm not convinced that just making great cars will increase their sales enough. It worked for Hyundai, but it took them 20~30 years and they were starting from 0 (the general public had little knowledge of them until the late 90's) where I would say GM is starting from the negatives. Further, Hyundai had a two pronged marketing strategy, they made good cars with good value. GM is making good cars and apparently that's it. As a consumer, so what? Honda is making good cars. Ford is making good cars. Kia is making good cars. Good isn't good enough. Because good is everywhere and doesn't differentiate you from the competition. If you don't have the elegance of Lexus, or the value of Kia, or the sportyness of Mazda or Nissan, or the reliability of Honda, or the "didn't take any bailout" of Ford, then IMO you're running a race with only one leg.

Great points bepper.

I really am glad they're competitive again. I don't "get" GMC's strategy as it is now, but glad to hear that the Terrain is that good.

But neither GM nor Ford nor Chrysler are competitive (certainly not "best in class") in every segment. I agree with robert4380 - the importance of a truly excellent compact car to take on Civic, Mz3, etc. cannot be overstated. They also need a top shelf Caddy that can go toe-to-toe with S-class and 7-series. And when they have a hybrid as good as the Prius, then I'll be really convinced.

Good points bepperb. But, Karl you quoted this perennial GM flaw or issue "General Motors currently has multiple models across multiple platforms and multiple brands" When GM is able and capable to cut that "money pit" problem then I will give them a future in the auto industry.

I'll post what I did on your tweet

"turning point? Towards what? I hear Lutz is coming back to run opel.

BTW, hows that hummer sale going? Oh and all that cash that was going to come from saturn?

Finally. That small curze that was going to compete with the civics/corrolla's of the world?

Right, thats delayed too.

Anyone get to drive the volt yet in the extended mode. (outside of gm)?"

I'd like to add: Whats the point of buick?

Does GM need both Buick and caddy? Why?

Then again, GM has all this cash from selling cars on hand that they just blew 3billion EURO on opel.

Which I thought wasn't allowed? (since they are using taxpayer dollars)

A number which Moody's says is bogus.

http://www.reuters.com/article/managementIssues/idUSL950272420091109?sp=true

"GM [GM.UL] has said it needs about 3 billion euros ($4.5 billion) to restructure Opel, which it trumpeted as "significantly lower than all bids submitted" in the Opel sale process, including Magna's request for 4.5 billion euros in state aid.

Credit rating agency Moody's, however, pinned the total funding requirement for Opel at $8.5 billion, nearly twice GM's publicly stated figure.

"The question remains, how will GM fund Opel? We do not think that the company's liquidity position -- including the resources available from the U.S. Treasury -- are sufficient," it wrote on Monday."

Please show me again where this company is going to be able to pull a turnaround?...

And payback the goverment... errr tax payers 50 billion dollars...

excatly how? Selling 40k volts with 10k of goverment credit on the hood from the get go?

(which would still put the car at the high end of what 'average' people buy)

Or that caddy converj, 2 door volt, with what price tag?

ya GM's turning around. Turning around to now burn taxpayer dollars.

GM is in an interesting position right now. They're rolling out product that's good enough to make a turnaround, but how they deploy that product is going to be the key.

Although, from all reports, the Terrain is an excellent vehicle, what is its place in GM's overall picture? What is the place of GMC as a whole, being a division that has no unique product?

And with the new Cadillac XTS being a front-wheel drive, how are they going to differentiate it from Buick products going forward?

But the biggest question has got to be around the Volt and Converj. Will they drop the price of the Volt below that $40k level now that there's an upmarket sibling with which to share the costs? Or will they leave the Volt price alone and mark up the Converj to differentiate it from the Chevy?

Karl, try convincing Sadlier that the Equinox and Terrain are as, possibly more appealing to the competition. He doesn't seem to think so.

Karl,

As a point of interest, here is what I posted on your twitter earlier:

Surprised by your bailout comment. The bailout was wrong on every single level.

1. Government has no business picking winners and losers. Weak companies should be allowed to die so newer, stronger, more innovative companies can thrive. There is only so much capital available and to squander it on failing companies (any failing company) is morally wrong.

2. Why are GM jobs (or any other auto jobs) a ticket to lifetime employment? If the GM bailout is "good," why stop there. Let's bailout Delco, auto dealers, oil lube places, parts stores, car washes, well, you get the idea. Is there a possible moral hazard to bailouts?
3. Secured creditors lost billions in the GM bailout. Teachers Unions, pensions and other secured creditors were not paid par for their investment because Obama deemed union jobs were more important than secured creditor's rights (as established by several hundred years of bankruptcy laws). Once again, do you see a moral hazard here?

4. GM has absolutely no hope of ever paying back the billions of dollars that were "loaned" to them by the US Government. They do not produce enough cars to ever make that possible, much less generate a profit. GM will be back for more money within five years. What would you say then? Do we give them more of our money?

5. The end never justifies the means. There is NEVER EVER any free lunch. Use whatever euphemism you like, but the bottom line is that GM should have died, deserved to die and eventually; will die anyway. So be it. That's right, fair, moral and just. We will have better cars available because of their death. That's a good thing, right?

6. I know you know all this. That is why I am surprised by your comment. As for GM turning the corner, let's see how they are doing in February or March, after the ALT-A mortgage market collapses, a Geo-political event happens (Iran/Pakistan/take your pick) and gas prices double and unemployment reaches 11%. Cash for Clunkers II anyone?

Now, to specifically address your post, I also believe GM is making great vehicles. Their smaller cars (Cobalt/Aveo) are very average compared to their competitors, but I have owned one and rented the other and; as with any new car today, they were both reliable, inexpensive and fairly fuel efficient. Cutting edge? Hardly, but as transportation devices they were totally adequate. The newer offerings hopefully will be much better. Love their full size trucks. I think they are as good as anyone’s offering. They truly have (most) of the market covered, with the exception of minivans, but I guess crossovers fill that niche.

Here’s the rub, however. This is not about building better cars or market share anymore. GM is way past that, now. This is about debt. Even today, GM owes multi-billions in debt that can never be repaid from operational cash flow. It is impossible. GM will not sell enough cars to even repay their smaller creditors, much less the US Government. So… they won’t. I believe it is Stein’s Law that states: “What cannot continue, must end.” So it is with GM.

Years of management waste, ineptitude, union greed, marginal cars and mortgage market fraudulent profits have combined to kill GM. Sooner or later, their debt must be reconciled, either through liquidation, more Government support or consolidation with another auto maker. People will lose their jobs. Cities and states will be harmed. Lives will be greatly disrupted. Retires will lose their pensions. It will be tragic. Sadly, actions have consequences, as they have since the dawn of time.

So… Karl, you are now king of the (auto) world. What would you do with GM? Feed them someone else’s easy and free money (like a welfare queen in the Bronx) and kick the can down the road a couple of years or acknowledge the reality of the situation and let GM die of their own accord? Rock, meet hard place.

Is GM Actually Going to Pull Off a Successful Turnaround? No. GM needs to not only design competitive vehicles, but also sell those vehicles at a significant profit in a market with too much manufacturing capacity. GM product, while much improved, isn't strong enough to demand the price premium necessary to cover GM's higher costs.

When GM finally get liquidated, who buys what? There are some pretty good models that someone else besides GM could probably build at a profit. The industry consolidation will be interesting to watch.

george2040 and pflyer, while you make valid points about the size of GM's debts, I really doubt that the debts are so high that GM can never repay them from their car sales! I mean, if it's that bad, I believe that the government wouldn't have bailed them out. They didn't bail Chrysler out until they made a merger that would make them viable, so GM wouldn't have been bailed out if there was no hope.

Karl, I agree with your assessment of GM's cars. Bepperb made some great points about GM needing to offer something besides good/great cars. I'm wondering whether that something else could be "American character"......cars like the Camaro have that, but it would be nice for GM to somehow make their other models have that character too.

blackadder5639 said:

george2040 and pflyer, while you make valid points about the size of GM's debts, I really doubt that the debts are so high that GM can never repay them from their car sales! I mean, if it's that bad, I believe that the government wouldn't have bailed them out. They didn't bail Chrysler out until they made a merger that would make them viable, so GM wouldn't have been bailed out if there was no hope.

pflyer: Thanks for the comment. The bailout has nothing to do with the government getting their money back. It's political, not financial. As for your comment about our government, these are the same idiots who buy $300 hammers and had FEMA in charge of hurricane relief. Unfortunately, there is very little accountability in government and Americans like their medicine sweet and easy.

When did 1487 hack into Karl's account?

I was going to go on a long rant about how Karl is wrong, but Bepperb summed it up quite nicely.

Karl, what made you test drive a GM product? Was it a piqued interest or a job necessity? Do you see others giving GM a chance?

CBO says the taxpayers might get back ~60% of what we gave gm.

IMHO, from reading the numbers. Theres almost no way we see much if any of the money we gave GM.

They along with chrysler should have been allowed to fold.

According to these links in today's Detroit papers, GM plans on starting to repay its government loans soon:

http://www.freep.com/article/20091111/BUSINESS01/911110460/1331/GM-may-pay-on-its-loans-soon

http://www.detnews.com/article/20091111/AUTO01/911110340/1148/GM-may-repay-some-fed-aid-in--09

more brilliant GM turnaround news:

German EconMin says no state aid needed for Opel
http://www.reuters.com/article/companyNews/idUSLC34167220091112

But GM that knows whats going on claims:

General Motors reiterated on Friday it wanted state aid to help restructure European arm Opel after Germany's economics minister said the carmaker would not ask European taxpayers for help.

http://www.reuters.com/article/GCA-Autos/idUSTRE5AC1BI20091113

which of course means

"GM executives including CEO Fritz Henderson have indicated they could rely on U.S. taxpayer money if needed, "

GM is awesome:

At losing money.

This is all about making money. If the market hits 13M units or so GM will make money. Case closed. None of this other talk is relevant and the opinions of the naysayers will be moot. GM already has a structure in place to generate profits as long as they maintain 18% share and sales hit a certain level in the US. They have about 21% share as of last month which totally makes the "experts" who predicted 15% share after the phase out of Pontiac and Saturn look like fools. Pretty much everything the "experts" have predicted since the bankruptcy hasn't happened. There has been no massive defection to Ford, there has been no huge loss of share, the new models are selling well, etc.

bepperb:

None of what you said makes any sense. Your comments could be applied to ANY automaker. If you say "making good cars isn't enough" then you better warn Toyota, Honda, Ford and everyone else. furthermore, the response to GM's recently launched vehicles pretty much invalidates everything you wrote. the SRX that Edmunds and a few others have bashed as uncompetitive just had a better month than the RWD model EVER had. This is a vehicle that some in the press have claimed is a step backwards from the slow selling previous model. Unlike Hyundai, GM was still the #1 seller in the US before Chap. 11. They have lost a lot of ground over the years, but their overall market position was still stronger than that of Ford, Hyundai/Kia or anyone else who is trying to move up the sales charts. For all the hype over Ford, they still cannot surpass Toyota in US sales.