There’s no denying that General Motors has been on the upswing for the last couple of years. Starting with the killing off of the Oldsmobile dead weight and shifting Saturn’s purpose in the lineup, GM’s immediate future looks very bright indeed. Yesterday Vice Chairman Bob Lutz spoke to reporters about the progress GM is making on rebuilding its stake in the automotive industry. “It’s a substantially improved world, and I would say our situation product-wise, reputation-wise, labor-cost-wise is probably the best it’s been in 20 years,” Lutz said in an interview with the Detroit Free Press “I would say all of the stars are aligning very nicely. … But are the worries over? No.” The big fear now, Lutz said, is “ill-conceived” government-imposed fuel economy standards at the state or federal level.
Indeed, if a proposed legislation for California’s fuel economy standards were passed today, GM would be unable to sell 80% of its vehicles. Popular SUVs like the Suburban would have to be replaced with vehicles roughly the size of the Saturn Vue. Small cars like the Chevrolet Aveo would have to be considered mid sized cars. This would inflate prices for sure, and you had better believe that virtually every automaker would be crushed by the passing of such a law.

GM has also got a lot riding on the 2008 Chevrolet Malibu, which it has spent a reported $100 million on advertising alone. They are hoping to win awards with this car while shifting public perspective of their products. You may recall not too long ago that for the first time in nearly a decade, a GM vehicle (the Saturn Aura) beat out Honda and Toyota for 2007 Car of the year.

Auto industry analyst Joseph Phillippi went on record as saying “On a scale of one to 10, GM’s probably at a four” in its renaissance. “They’re really starting to bring it all together on the vehicle side … and with the new contract. It took a long time for them to get there, but they’re really starting to accelerate.”

Bob Lutz said “This is potentially the dawn of a new era, but we’re not there yet.”
[Source: Freep.com]