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Monday, May 02, 2005

Oh Wow.

The Detroit Free Press is having a really well done three part series on the fate of General Motors. The first two parts basically tell us what has happened at GM, but it's the third article that came out today that I find fascinating. Here's an example:

GM, though, has firmly stood by its position that it doesn't think gas prices are having much impact on sales of full-size trucks.


"I know it's popular to write the obituary on large trucks because of gas prices," Paul Ballew, GM's executive director of global market and industry analysis, said during a conference call in April.


He added that it's "hard for us to find a lot of evidence to support that."



If that's the case, Paul Ballew needs to start updating his resume. That's just asinine. The evidence that fuel prices will increase indefinitely over the long term is just enormous and obvious. Don't believe me? Then why is EVERY OTHER MANUFACTURER putting more of an emphasis on cars and crossovers? Is GM being bold and innovative and about to rock the market by staying with something virtually every auto analyst out there says is gone, i.e. the SUV fad?

One factor people need to take into account is that buying fuel is something a person does regularly, and usually is an appparent expenditure. What I mean by that is that a person KNOWS when he is spending more money as gas prices rise. It's not an unconscious expenditure like food, or paying rent.

It was this quote from the article that just killed me:

In order to bring the new [SUVs] to market by Jan. 1, GM has pulled engineers from an important car-development program in order to help.

That at about says it all.

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