The road a new GM must take

Alisa Roth Jul 6, 2009

The road a new GM must take

Alisa Roth Jul 6, 2009


Kai Ryssdal: Robert Gerber is clearly a guy who doesn’t like to waste time. For those not familiar with the roster of federal judges, Gerber is running General Motors’ trip through bankruptcy court. Usually it takes more than a year for companies to make their way to the other side of Chapter 11. But the way GM is moving, it could be out in months. And Judge Gerber really put the pedal to the metal last night.

He ruled GM can indeed sell off the best parts of its business to a new GM. It’ll be owned by the U.S. and Canadian governments and a union health-care fund. It will have all the best brands GM’s got left. But will it still have a place in America’s heart? Marketplace’s Alisa Roth has more.

ALISA ROTH: American cars used to be practically synonymous with an American identity. But America isn’t what it used to be. And neither are its cars.

Michael Robinet follows the global market for auto consultancy CSM Worldwide. He says the new GM can’t bank too much on its gloried past.

MICHAEL ROBINET: Chevrolet as we may have known it back in the 50s or 60s will have to stay there.

Instead, he says, the company needs to move past its history. To create something new that people actually want to buy. That will most likely mean smaller, more fuel-efficient cars. It’ll definitely mean fewer of them.

Alan Baum is an auto consultant in Michigan. He says to see the future, take a look across the Atlantic.

ALAN BAUM: If you look at the European market, you see a market that is essentially very competitive with a lot of players, none of which have dominant shares.

GM sells well in China, so it’s already realized that it has to compete globally, and not just in the U.S. Baum says now it has to figure out what companies like Toyota have been doing for a long time: build a kind of transnational vehicle, at a reasonable price.

John Quelch studies marketing at Harvard. He says GM can’t rely on waving the American car to sell cars anymore.

JOHN QUELCH: There are relatively fewer and fewer consumers who are willing to pay a premium or suffer a deficit in product quality in order to be patriotic and buy American.

Quelch says GM has to build a new car for America. Not the new American car.

In New York, I’m Alisa Roth for Marketplace.

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