That lack of praise, of course, has a lot to do with the ginormous, taxpayer-funded bailout that kick-started GM's return to glory. But nonetheless, the General has made good progress -- surprisingly good, to many longtime GM-watchers -- toward its goal of profitable global domination.
That said, there are still plenty of reasons to worry. Here are three big ones.
Reason No. 1: Is this product renaissance for real?
Ford's turnaround has been driven by a lot of factors, but the most important is this: The Blue Oval's cars and trucks have become really, really good -- good enough to compete with the best anywhere.
GM has been working hard to bring its game up to the same level. So far, the results have been promising: The Chevy Cruze is a good, solid compact, probably GM's best-ever; the new Sonic subcompact is seeing strong sales in a tough segment; and upcoming models like the Chevy Impala and Cadillac ATS look very good so far.
But, while the results have been promising, they haven't been great. The Cruze is a very good car, arguably better than Toyota's (NYSE: TM ) current Corolla -- no small achievement -- but the category has moved forward, and Ford's Focus and Hyundai's (OTC: HYMTF) Elantra have both outshined the Cruze in comparisons. Likewise, the Sonic is also very good -- but it isn't in danger of making people forget Honda's (NYSE: HMC ) much-acclaimed Fit.
In a nutshell, CEO Dan Akerson's goal is to make GM the biggest, best, and most profitable car company in the world, period. If he can do for GM what Ford CEO Alan Mulally has done for his company, he'll get there -- or at least far closer than anyone would have expected a few years ago. But, to do that, GM's cars and trucks have to be awesome -- better than everyone expects, and at least as good as the world's best. That won't be easy: Ford is at the top of its product game, Toyota is determined to come back strong after a couple of difficult years, and Volkswagen (OTC: VLKAY) is on a global roll -- and determined to steal the global sales crown that belonged to GM for years.
GM is expected to release a slew of new models over the next couple of years. Will they be as good as they need to be? Early results are promising, but GM's long history of mediocrity means that the jury is still out.
Reason No. 2: The problem of GM's culture remains
Ford's products got better in part because CEO Alan Mulally was able to accomplish what many thought impossible: He cut out layers of management, got rid of recalcitrant leaders, and changed Ford's culture from a morass of warring fiefdoms to a lean, focused machine.
Ford is a sprawling global giant, but nowadays it seems to speak with a single voice and act with a single vision. That's Mulally's signal achievement -- and it's one that Akerson is working hard to emulate.
But Akerson's job is a lot harder. GM is a lot bigger than Ford and it was much more broken. Here's just one example: According to some accounts, GM didn't even have workable internal financial controls before former CFO Chris Liddell took charge after GM's bankruptcy.
Think about that. GM's leadership didn't have a clear understanding of how the money was flowing within the company. And they were OK with that.
That's what Akerson has to fix, top to bottom, throughout a vast global organization. From all appearances, he has made progress. But getting GM's rank and file to really buy into the vision of transformation is going to be a long job -- and if it doesn't get done right, GM will almost certainly slide back into mediocrity.
Reason No. 3: No, it's not Europe
I've written extensively about the money-losing mess that is GM Europe. GM Europe, and specifically GM subsidiary Adam Opel AG, is going to be difficult to fix -- but I'm reasonably confident that it will get fixed sometime in the next few years. While it will take longer than Akerson would like, he's making the right moves and it'll happen.
That's not a real reason to worry about GM. Here's a real reason: The General's market share is falling here at home. GM led the world in total sales last year, thanks in big part to its market-leading position in China, but its per-sale profits in China are a fraction of what GM makes on every vehicle it sells here at home.
The bulk of GM's sales may now be overseas, but the vast majority of its profits are generated here in the U.S. And GM's U.S. market share is falling -- just 17.8% for the year through May, compared to almost 20% for the same period last year.
Part of the problem is that many of GM's models are looking long in the tooth -- and that's a problem that will be addressed over the next couple of years, as the slew of new models arrives at dealers. But again, part of the problem is that the competition has stepped up its game.
Long story short: Where is GM really going?
Here's the whole thing in a nutshell: GM came out of its high-speed bankruptcy restructuring with a lot of its old problems fixed, but a lot more still needing attention. CEO Dan Akerson has recognized and attacked those problems in a mostly impressive style, all things considered, but there's still a long way to go -- and GM's history gives us several reasons to think that the company might end up reverting to its old, just-functional-enough self.
The investment case for GM, as I see it -- and I am a GM investor -- is a bet that Akerson really can transform GM. Can he? I think so, but as I've explained, there are real reasons to worry.
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