General Motors' Priorities

General Motors is in deep financial trouble. This is mostly because its products are, on average, inferior to the competition. Secondarily, this is because it carries a lot of legacy costs in the form of old plants, high wage structures and lots of retiree benefits to support. The secondary reasons are to a great extent a result of its declining market share. But for favorable accounting rules, it might even be considered insolvent on a balance sheet basis.

It has tried to postpone the inevitable a little longer by spinning off Delphi and selling a big portion of the one profitable portion of its business, GMAC. But, the time it has bought with these manuevers is not going to last forever. Month after month of double digit declines in sales from the same month in the previous year, despite huge discounts from MSRP on retailers lots are going to catch up with you, and every available resource of the company needs to go into changing that trend.

General Motors shouldn't be squandering its limited resources bringing half baked lawsuits trying to shut down body kit companies making a product that is vaguely similar to its Hummer line of vehicles, which have virtually no impact on the General Motors bottom line. How many neighbors do you have that have purchased a body kit for their four wheel drive truck?

If General Motors had any sense, they'd be encouraging this kind of activity, because imitation is the sincerest form of flattery, and creates hype that money can't buy for your product. But, their general counsel is too focused on possible legal rabbit holes that can keep their the intellectual property firm they have on retainer occupied, and not focused enough on focusing on litigation that creates value for the company from a strategic perspective.

They'd be better advised to do something along the lines of what Hyundai did with its 10 year warranty, i.e. look for a way for the legal department to create value for the customer, instead of trying to harass the competition.

For years, General Motors has decried the too strong dollar as the source of its woes. Well, the dollar has never been weaker in recent memory, and General Motors still has an anemic bottom line that flows from weak sales. Until General Motors can convince the reality based Consumer Reports reviewers that its flagship products don't suck, the trend is going to continue.