After a long bout of denial, General Motors
GM reported earnings a couple weeks back, and the results left most investors cold. Heavy incentives (that recently got heavier) and losses in Europe are taking their toll. And the company has been slow to wake up to consumers' interest in fuel economy.
By now, Detroit's incentives addiction is widely known. How to escape from the margin-crushing effects of the incentives trap? DaimlerChrysler
For its part, GM has been daring in its styling at its Cadillac division, and sales of those vehicles have been encouraging. But many other segments remain tired. In a bid to change this state of affairs, the company plans to invest $3 billion in its long-suffering Saturn unit to give those vehicles a much-needed makeover. Models in the works include a roadster, a new sedan, and a new sports utility vehicle.
On the fuel efficiency front, GM is finally, tentatively, introducing hybrids, even as its Detroit rival Ford
Finally, General Motors is tackling its problems in Europe. The 12,000 layoffs the company plans are a painful yet necessary measure if the firm hopes to restore its competitiveness on the continent.
In short, GM's problems aren't likely to go away overnight. But the sleeping giant has been awakened, and that alone is reason for hope.
Fool contributor Brian Gorman is a freelance writer living in Chicago. He does not own shares of any companies mentioned here.