Stephen Foley: Detroit looks to hit the gas again as confidence rises
Thursday 05 November 2009
The General Motors board performed what amounts to a handbrake turn over the sale of Vauxhall and Opel. It is an audacious piece of driving from a team that has not proved itself particularly adept behind the wheel, but spirits are intoxicatingly high in Detroit at the moment.
Both GM and Chrysler came through their state-sponsored bankruptcies in record time, and Ford – which never went bust – is even back in the black. The industry enjoyed bumper car sales over the summer, as the US Government pumped $3bn into "cash-for-clunkers" subsidies and the taxpayers of other countries chipped in to support their local markets, too.
Meanwhile, financing for new car purchases is getting easier to come by, and the return of consumer confidence led to decent vehicle sales figures in October, even without government subsidy. At the current run rate, the US is on course for 10.5 million vehicle sales a year, which is a squeak above the 10 million rate at which restructured GM is supposed to break even.
Sergio Marchionne, the Fiat boss now also in charge at Chrysler, was looking to the future in an upbeat strategy presentation yesterday, unveiling new models and technologies, but he was also counting the pennies, saying Chrysler was being "parsimonious" in its cost-cutting.
Parsimony is harder for GM's entrenched and emotional management, whose optimism is less often the result of hard-headed analysis than it is the result of a longing to avoid hard choices. When it cited the improving business environment as a reason for keeping hold of Vauxhall and Opel, alarm bells rang in many quarters. Its switch of strategy has so upset the Germans that it could trigger strikes, a consumer backlash and a tougher line on state aid. Opel's new/old owners are going to have to start planning for the worst, not hoping for the best.
- 1 Howard Jacobson: Let's see the 'criticism' of Israel for what it really is
- 3 Belgium fan Axelle Despiegelaere lands L'Oreal campaign after World Cup viral photo
- 4 Britney Spears sings 'Alien' without Auto-Tune in embarrassing leaked audio clip
- 5 PornHub begs users to stop uploading video clips of Brazil getting beaten 7-1
Instagram of US airport security chiefs: Lipstick knives and IED training kits among items seized
Game of Thrones author George RR Martin says 'f*** you' to fans who fear he will die before finishing Westeros saga
Mick Jagger denies being World Cup curse and reason for Brazil’s embarrassing defeat
Israel-Gaza crisis: ‘We just want it to end… We don’t deserve to live like this’
Israel-Gaza crisis: Eight killed in Gaza Strip cafe while watching World Cup semi-final
Sustained immigration has not harmed Britons' employment, say government advisers
Australia facing international condemnation after turning around Sri Lankans at sea
7/7 memorial defaced on anniversary of 2005 attacks with ‘Blair lied thousands died’ graffiti
Even when it brutalises one of its own teenage citizens, America is helpless against Israel
Socialist Worker called to apologise over ‘vile’ article saying Eton schoolboy Horatio Chapple's death is ‘reason to save the polar bears’
There’s a nasty smell in the political air – and it’s coming from the Tories
iJobs Money & Business
£12 - £15 per hour: Cameron Kennedy Recruitment: Excellent opportunity to join...
£400 per hour: Orgtel: Technical Business Analyst - Banking - Bristol - £400pd...
£38000 - £42000 per annum + competitive: Real Staffing: Required skills:Previo...
£60000 - £75000 per annum: Harrington Starr: Business Analyst Consultant (Fina...