The GM Diet
Danny Hakim reports in today's NY Times that GM execs have finally come to their senses. Faced with an excess of too similar vehicles that not enough people will take off their hands without huge kickbacks, and with Toyota and Honda breathing won the General's neck in the popular pick-up and fullsize truck markets, GM has decided to rationalize its product lines. As I suggested in the post below, the Buick Terraza was an example of filling a slot in the marketplace just so you could say this car line is filling a slot in the marketplace. That wouldn't be a problem if trying to be more than anyone wants weren't so darn expensive. While I won't take full credit, I will note that a little more than a week after the post below first ran as a newspaper column, GM is doing the right thing. From now on, only Chevy and Caddy will carry a full line of vehicles, allowing the other brands to not just save money, but create distinct identities. Looks like GM is finally beginning to realize it cannot ignore that basic law of economics: Never worry about sunk costs. For all the American jobs at stake, we hope GM comes through this stronger than ever. GM's cars are better than they have ever been, and the new J.D. Power reports show consumers are beginning to get the message. Now if the policymakers in Washington would work as hard on healthcare as GM has been doing on its cars, they may be able to address a system that has American cars costing $1,000 more than many foreign competitors just because of healthcare costs, while quality measures show our ultra-expensive, inefficient system is only good for a rank somewhere in the 20s in the world despite those tremendous costs.
posted by Andy Mais @ 4:22 PM
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