The severity of General Motors' downsizing plan came as a bit of a shock to US commentators this week, but was it unexpected, Jasmine asks?that unexpected, Jasmine asks?content here
The severity of General Motors' downsizing plan came as a bit of a shock to US commentators this week, but was it unexpected?
The company lost just over R6,6 billion in the first quarter of this year, so with shareholders demanding that heads roll, the rationalisation announcement was not quite unexpected. A lot of the company's resources are spent on employee pensions and health plans and even thought the company is cutting staff numbers, the General must wake up to the fact that rival manufacturers (not based in the US) are rapidly encroaching on its core home market.
That the Hummer range is the most exciting offering from the company is sad, though the future production of the H3 in South Africa is good news for us. And based on the power of the Opel brand and its continued advancements, its unlikely that GM's German-based division will die out soon.
Sadly, Sweden's Saab, at one time one of the most desired alternative marques, has virtually faded into obscurity and continued attempts to revive its former mainstay, the 9-3 continues to fall flat.
Chevrolet has also come under fire - the once proud brand has been knocked down a few notches and now seems destined to a life of Aveos and Optras and all the rest of GM's accumulated loose ends.
But the US remains its primary market and when the likes of Pontiac, Buick and Oldsmobile started slipping into an irrecoverable slump, the company sprang into action, as even its valuable home market buyers have swum against the "buy US" flood and started looking for vehicular inspiration elsewhere.
So, seeing its machine hurtling towards the edge of the abyss, GM called "panic stations" and promptly cut some of its production facilities and fired 25 000 workers (albeit over a three year period) to fix its cash flow problem.
Amid talks of streamlining and future plans, chief executive Rick Wagoner insisted that the multinational's survival hinged on a new wave of vehicles. Let's hope these will be adequate replacements for the current line-up of stolid and unimaginative models.
Of course, GM will fight the slump to its death, and while chances are it won't come to that, extinction is a natural progression and usually good all round. If the dinosaurs hadn't kicked the collective bucket eons ago, we may have made an easy meal rather than the dominant species we are now.
Maybe GM's recession would be a good thing for the global industry. Previously sidelined brands will become more competitive and it may spark a design trend in pretty cars again. That would be very nice...
Original article from Car