I think I'm as patriotic as the next person, but earlier this year, when I was in need of a new car, I made a beeline for my local Toyota
Unfortunately for the likes of General Motors
Before we look further at Kerkorian's departure, allow me to note that, according to November sales figures released on Friday, Toyota increased its unit sales by nearly 16% year over year, while Ford's sales dropped by 9.7%. GM, on the other hand, sold 6.1% more vehicles than in November 2005, while DaimlerChrysler's sales were up 4.7%.
Nevertheless, GM without Kerkorian must still concern itself with the same gremlins the company has battled for several years. Progress is being made, however. Labor costs remain an issue, even though the company was able to persuade 35,000 hourly workers to leave under buyout plans or through early retirement. At the same time, while health-care expenses have added about $1,500 to the cost of each and every vehicle rolling off the assembly line, the company has been able to gain some concessions on this issue from the United Auto Workers union. And on Thursday, GM completed the sale of its 51% interest in GMAC, its former finance arm.
But what do you suppose constitutes GM's largest and stickiest difficulty? It's my contention that, as long as our world faces the specter of higher crude prices, the American companies will have difficulty competing toe to toe with Toyota, Honda
And so Kirk Kerkorian has cashed in his GM interest -- at least temporarily, as many observers note. And therein may lie the most inspirational aspect of this entire episode: The man is 89 years old! Yet there's still discussion of his eventually returning to take on GM management with an increased vengeance? If, at that advanced age, I'm still able to recall the difference between "D" and "R" on my transmission indicator -- let alone take on management or anyone else -- I'll be ever so proud.
For now, GM's share price is about 50% higher than it was at the beginning of this year. That, combined with the abovementioned gremlins, makes it a vehicle that Foolish investors shouldn't chase.
Rev up with more GM Foolishness:
- Does Ghosn Want GM?
- Nissan's No General Motors (Thank Goodness)!
- 5 Hated Stocks
- GM's Turnaround Opportunity
Automakers aren't the only foreign companies experiencing remarkable success. Take a 30-day free trial of Motley Fool Global Gains and let Bill Mann and his team help you locate other great opportunities on distant shores.
Fool contributor David Lee Smith doesn't own shares in any of the companies mentioned. He welcomes your comments and questions. The Fool's disclosure policy has a 396, Fuelie heads, and a Hurst on the floor.