Wednesday, December 11, 2013

GM gets a lady CEO

This was all over the news.  Mary  Barra is a old time GMer.  She started with GM 30 years ago and is still there.  She is an engineer and comes up thru manufacturing, which is closer to the core of GM than the bean counters who preceded her.  I figure any woman who lasts 30 years in place like GM has gotta be pretty competent, or she would not have survived.  Of course, I never heard of her before now, but then I don't follow Detroit news much.
   The real question for the survival of Govt Motors, is she a car person?  Can she bring to market cars that sell?  Can she champion  new cars that sell the way that Iacocca's Mustang, Arkus Dutov's Corvette, and Bunkie Knudsen's GTO did?   Cars that make enough of a dent in popular culture to be the subject of pop songs.  As opposed to GM's current lineup that  is so bland that only renta-car companies like them?
  For GM's sake let's hope.  A lot of this is perceived value.  Back in the good old days, Chevy had more perceived value than Ford.  Used Chevys sold for more money than used Fords.  This was due to good styling, that successfully steered a middle course between too radical and too stogy.  Chevy engines were less troublesome and more powerful than Ford engines.  Chevy 409's dominated NHRA drag racing.  A generation of block head GM management has pretty much destroyed this legacy.  At this time, Toyota commands more respect than anything from GM.
  Ms Barra first needs to understand that GM  is a huge company, which means it has to compete for the center of the car market.  Which is the low cost four door four passenger sedan, the commute to work car and the go to the store car.  GM needs to gain share in this market.  This is Chevy Cruze and Impala turf.  GM needs a well styled, competitively priced car in this market segment.  Real volume.  About 12 million new cars a year are sold in North America.  Of this, a quarter, say 4 million cars, are plain four passenger sedans.  That's enough volume to keep GM going.
   Contrast that with Corvette.  There simply ain't enough guys with Corvette money to keep GM alive.  It's a great car, but you need a bread and butter seller to keep a behemoth fed.
   How to proceed?  Simple stuff like reliability and ruggedness is a good place to start.  Some favorable mentions in Consumer Reports.  Some top of the charts gas mileage.  For instance Cruz is only doing 30+ mpg, whereas you need to hit 40 mpg before anyone cares much.  Cruz has a good deal more horsepower than it needs.  You can trade off power for gas mileage.  A 40 mpg 60 hp car is a better seller in that market segment than the current 28 mpg 138 hp car.   The old VW Beetle was perfectly driveable with only 36 hp.  The Dodge Caravan's were driveable with 80 hp and a lot more weight and airdrag.
    Better styling.  The current Cruz is nose heavy and bland.  The silhouette is round, slopes up the front, slopes down the back, boring, and so many others have it too.
   Anyhow,. Mary Barra has her work cut out for her.  She has to get decent sellers designed, and then force them thru all the institutional resistance and NIH, get them on sale, and promote them properly.
  

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