The Government Motors Dilemma

By Stephanie Quach

Let’s try to be positive about GM’s bankruptcy. There aren’t much great things about it obviously, but still, we’ll make an attempt.

According to GM, their market share in 5 years will remain at 19%. Well, better to remain the same than lose more. The Cadillac CTS won the award of 2008 Motor Trend Car of the Year. Looks like boxy, Mercedes-look alike cars are in. If you can’t afford a real German Mercedes, buy a Cadillac for less than half the price!

Imagine going to Budget to rent a car. Who would jump for joy when you get a gas-guzzling Pontiac instead of a Honda Accord? Although it is important to be patriotic and buy American cars, the fact is that American cars break down more than Japanese cars. The fact is that American cars cannot beat its Japanese rivals and German rivals. Sure, American cars are cheaper than their rivals’ but eventually cost more because all those repair bills at the auto shop add up. No wonder customers are willing to pay $2000-$3000 more to get a better quality Japanese car. GM needs to improve on the quality of its cars. Do what China and Japan did in the past. Buy Japanese and German cars, get your engineers to open them and learn how to create better quality cars. Or as Ronald Fricke president of Regal Assets as recently stated buy the company, like China has with Hummer.

Global insight predicts that GM will start becoming profitable next year and very profitable by 2014. After cutting out the Hummer, Pontiac, Saab and Saturn brands, and one third of its workers, GM will be able to cut costs as well as focus on what is left of it, if anything is left…

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