Word: gm
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Dates: during 2000-2009
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...your nightstick, officer. It's the 2003 CTS, which will go down in history as the car that started Cadillac on its march back to quality. If you were ever a fan (as in, the '59 Eldorado) it's finally time to blow away the nightmares of GM's experiments with "small" or "sporty" Cadillacs, like the Cimarron or the ridiculous Catera, which is really an Opel (a company which, by the way, just announced a historic $608 million loss...
Still, the test of Lutz's magic will not come until these cars hit the road in several years. Meantime, the company faces daunting challenges. One is a testy relationship with the autoworkers' union. Another is that despite a hefty profit margin on trucks, GM's overall global operating margins last year were a paltry 1%, to Toyota's 7%, according to Morgan Stanley's Girsky. Today's weak yen worsens that situation by boosting Japan's dollar profits even further. GM's vast overseas operations, with the exception of its joint venture in China, remain a disparate amalgam...
...plus side, in recent years GM has made vast engineering gains that are beginning to show in components like the light, powerful new I-6 Vortec engine. In marketing, last September GM initiated the 0% financing program, applied it widely and got a bigger sales boost than its rivals. That lifted its U.S. market share nearly a point, to 28.1%. Analysts warned the program would result in fewer buyers in 2002. But GM has drawn down its inventories enough that new customers will have to pay top dollar for particular models they want--which could offset incentive costs...
Looking forward, auto-industry analysts are encouraged that CEO Wagoner, 48, has brought in outsiders like Lutz and chief financial officer John Devine (recruited from Ford a year ago). The hope is that they will be able to energize GM's vast talent pool, the engineers and designers largely ignored by bureaucratic prior regimes...
Lutz believes GM will be a turnaround story like Chrysler by the time he leaves in three years. "This gang has just the esprit de corps and even more capability than we had back then," he says. He acknowledges that once he left Chrysler, the company lost sight of its high-design, low-cost mission. "I realize now that what I have to do here is leave behind a system that works." Really, that's Rick Wagoner's job, but now he'll get a jump start from Bob Lutz...