Fallout: The Financial Crisis

Not all is new at revamped GM

Alisa Roth Jul 14, 2009
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Fallout: The Financial Crisis

Not all is new at revamped GM

Alisa Roth Jul 14, 2009
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TEXT OF STORY

KAI RYSSDAL: Its been less than a week that the new General Motors has been out of bankruptcy. But it’s starting to look a lot like the old one.

CEO Fritz Henderson said last Friday he’s going to build 10 new models over the next year-and-a-half, giving GM almost as many models on the road as it did before it went bust. And just yesterday a bankruptcy judge said GM can buy back parts of its old supplier, Delphi. That’d be the same Delphi GM dumped back in the late 90s.

Marketplace’s Alisa Roth reports on what’s turning into GM lite.


ALISA ROTH: The new GM is meant to be smaller than the old. Instead of 72 different vehicles, there will only be 34. It’s also planning to roll out 10 new cars before the end of next year.

Susan Docherty’s a VP at GM. She was showing reporters the latest version of Buick’s luxury sedan, the Lacrosse, today. She called me from the passenger seat.

SUSAN DOCHERTY: The best way to signify that our company is going to get back on track and be healthy is to introduce just a plethora of new product.

She doesn’t think the company’s introducing too many new vehicles.

Bruce Belzowski studies the car business at the University of Michigan. He says the numbers don’t matter. It’s whether people buy them. He says with its expansion and hiring moves, it’s easy to see why people might think the new GM is just more of the same old.

Bruce Belzowski: When you hear about GM hiring back executives who are supposed to be retiring, that can make people a little nervous about, “Are you going back to the old days?”

That would be Bob Lutz he’s talking about. A 77-year-old exec who retired in April, and just got hired back to run marketing.

GM’s also set to buy back some of the troubled parts maker Delphi, which it spun off years ago. But that’s not such a bad idea.

John Paul MacDuffie is a professor at Wharton. He says Delphi is still a major supplier to GM, and investing in the supply chain is the safest way to guarantee it.

John Paul MacDuffie: And if the suppliers are very weak, that will make it tougher for GM to have the comeback it hopes to have.

But then again, if people don’t start buying cars again, there won’t be a comeback for anyone in the business.

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

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