GM steers toward prosperity despite some major setbacks
Recent developments suggest that America’s largest automaker has turned the corner toward recovery and lasting productivity. After enduring a series of large-scale and embarrassing safety recalls to a large percentage of its product line earlier this year, recent reports indicate the company has made significant strides toward repairing its once-damaged public image.
In coming weeks, it must continue that journey toward fixing the defects that had battered its market share and weakened its customer loyalty. An increasing body of evidence, however, illustrates that GM is on the right course. Consider these recent achievements:
In its third-quarter 2014 earnings report released last week, GM registered net income of $1.38 billion, nearly doubling the $698 million profit it logged in the same quarter of 2013.
Consumer Reports, in its annual rankings of vehicle reliability released Monday, crowned General Motors the most reliable U.S.-based car company. Buick is the top U.S. brand on the market today, with each and every one of its models winning the reliable rating from CR.
Closer to home, the Mahoning Valley- produced Chevrolet Cruze continues to sell like hotcakes. GM’s sales report for September issued earlier this month documents the sale of 18,415Lordstown-manufactured Cruzes last month, compared with 12,730 sales of the compact in September 2013. That’s an impressive 44.7 percent increase in one year.
Taken together, those three inspiring reports fuel optimism for the company on the local, national and international levels. For example, for the first time this year, the third-quarter earnings report did not include any special charges of nearly $3 billion budgeted in the first half of this year for the many safety problems that led to the recall of 30 million GM vehicles.
“G.M. has apparently survived their recall crisis,” said Eric Ibara, an analyst with the auto research firm Kelley Blue Book.
A FEW TROUBLE SPOTS REMAIN
Nonetheless, GM is not totally out of the woods just yet. The automaker could still face more costs related to the legal fallout from its recall of its trucks and cars — including some made in Lordstown — equipped with faulty ignition switches or other flaws. A compensation program administered by the lawyer Kenneth Feinberg has so far linked the defect to 29 deaths and 27 injuries.
As for its glowing report from Consumer Reports this week, not all facets of it elicit accolades. For example, the pride of the Valley — the Chevrolet Cruze — has been ranked not reliable by the respected publication that is the go-to guide for millions of American vehicle buyers. In response, engineers and other leaders at the Valley’s sprawling 4,500-worker auto plant must study the criticisms, consider their merits and speedily fix any defects that could reduce the popularity and the spiraling sales of its signature product during the ongoing rollout of its 2015 models.
Too much is at stake to risk a downturn in the Valley plant’s momentum. After all, the plant and its spinoff industries inject hundreds of millions of dollars into the Valley economy, buttressed even more by profit-sharing checks averaging $7,500 last year for full-time GM workers.
Despite the lingering challenges at GM on the local and national plains, we’re reasonably confident that the automaker will harness the necessary resources and mindset to put an end once and for all to more than a decade of dysfunction and negligence in its monitoring of safety standards and to years of financial insecurity that landed it in bankruptcy five years ago.
In those ensuing five years, GM and its skillful local and national workforce have significantly tuned up the automaker’s product, popularity and prestige.