Latest GM SUV: Big and 30MPG

I don’t have all the details, but a quick look at this article shows that GM’s plight was, at least in part, avoidable.  The base model comes with a 182 horse power 2.4 liter engine, and gets you 30 mpg.  There is no reason in the world that GM could not have produced this vehicle two years ago.  In doing so, they would have seen demand shift from some of their other lines, but also from Ford, Toyota, and Dodge.  In addition, they could have easily picked up some gas guzzler trade-ins.  Why did they wait?  It’s quite simple: they have absolutely no foresight.  The GM motto could be “what works today will work tomorrow”.  Of course, that motto doesn’t work.

This to me supports the Obama position that if these guys want help they have to change.  I remain uncomfortable about the government running a company, and when this administration can force out long time CEO Rick Wagoner, that is what is happening.

Where then is the balance?  When should the government not use its coercive power when it doles out money to broken companies?  When should it let them fail?  And what does one do with the thousands upon thousands of individuals who have been mishandled by bad leadership?  I don’t know, but somewhere somehow they have to shoulder some of the burden.  Some of this is their poor decision to tie their fates to people like Wagoner, who really did need to go.

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