New GM needs to focus on future power trains
Emerging from bankruptcy, has GM eliminated the problems that got it there in the first place?
In 1996 GM bought the Renaissance Center in downtown Detroit, and occupied four of its seven towers. But the GM employees in those towers didn't actually build cars, a task left to factory workers around the world. That is one problem addressed by the new General Motors Company that just emerged from bankruptcy. GM CEO Fritz Henderson announced that the company would eliminate 35 percent of its executive positions, flattening its management structure. Henderson said, GM will focus on "its customers, its cars, and its culture," in that order.
GM retains four brands, Chevrolet, Cadillac, Buick, and GMC. Before the fall, Cadillac was on the right track, producing the CTS, which easily competes with European and Asian sport luxury vehicles. Product plans are still going forward for the CTS wagon, shown at car shows earlier this year. Likewise, the Chevrolet Volt will remain on track, a car that, if GM had begun development years earlier, might have taken the hybrid mantle away from the Toyota Prius. Buicks sell well as luxury cars in China, which explains the retention of that brand, and GMC still has cachet in the truck market.
In another move that might have saved the company if enacted years earlier, Henderson announced that one factory would be dedicated to producing a new family of small cars. Other models the company will still produce are the Chevrolet Camaro, Cadillac SRX, Cadillac CTS Coupe, GMC Terrain, and the Chevrolet Cruze. Hummer and Saturn are being sold as part of the bankruptcy proceedings, while Pontiac has been discontinued.
Henderson clearly wants to modernize the company. GM is initiating a new experiment, a partnership with eBay where it will sell new cars on the online auction site.
But has GM stripped away all of the things that originally brought about its downfall? Henderson's announcements at least suggest some common sense thinking, breaking away from the hide-bound company of the past, the product planning of which got sideswiped by external factors such as the high gas prices of 2008.
For GM's sake, and the U.S. public's 60 percent share, the company should be working on products that not only compete internationally, but also lead the way. With upstarts like Tesla Motors and Fisker Automotive taking advantage of this unique time in the automotive world, the decline of the internal combustion engine, GM needs to focus on its own alternative power train strategy. And that will require the flexibility within management to let the past go and embrace future technologies.