There has been some hoopla about how much better off the US economy is in part because GM and Chrysler were bailed out. What happens, however, as time goes on. What have these companies learned through their bail out? Anything? I wonder.
The old saying, teach a man to fish so he can feed himself into the future is appropriate. Ford, who did not take any Government money (and look at the new Escape! Nice!), is on quite the roll. The Focus, Fusion, Escape, etc are all doing very good sales wise.
GM, though, has had some struggles. At the end of 2011, the Chevy Cruze was experiencing a very large inventory surplus. The bigger issue, other than the fickleness of car buyers, is some of the decision making coming out GM.
All manufacturers are able to improve profits through accurately predicting sales and supplying just enough of a certain type of product to meet the demand. In doing this, excess inventory is not being produced and the need for large discounts is generally mitigated. But, GM isn't following the Japanese example. At the end of February 2012, GM's dealers had around 667,000 vehicles (vs 420,000 in Feb 2010) in stock.
Other signs that GM hasn't learned anything (and the investors in GM are stuck getting screwed twice over - once from their investments that were wiped out, twice through their tax dollars) comes from GM making their own little sub-prime loan situation. GM is gambling through increasing its lending to people who are at a high risk of default.
I leave with one other comment. GM just invested $400 Million of tax payer money into Peugeot. A French car manufacturer. GM already ownes Opel (and it is struggling). They claim that Peugeot has technology GM needs to help it be competitive. What is this, two wrongs some how make a right? If you want to gain access to technology, buy someone GOOD. Or is this a hidden agenda by the Obama Administration (I love to go all conspiracist)? Have a government take over of various manufacturers in the US so that the government can indirectly send US tax dollars to foreign countries in order to "thank" them for their support? Well, Mr. Sarkozy did help Obama with Libya.
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