Some old problems haunt new GM

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Crain News Service

DETROIT (March 3, 2014) — General Motors Co. is back — back in crisis mode.

Two months ago the company was celebrating the end of government ownership, plaudits for product quality and the passing of the torch to a new generation of leaders—including a woman—who spoke in rousing terms of a “new GM.”

Even so, the executives were frank about GM’s challenges: breaking old bad habits, closing the gap with competitors and overcoming image problems.

And last week GM found itself having to confront those challenges head-on.

Bearing down on the execs was a growing recall crisis that revived memories of past GM deficiencies—an ignition switch so poorly designed that a too-heavy key fob could render cars powerless and potentially deadly. Equally ominous were the hard questions raised by regulators about the company’s tepid response to deadly crashes linked to the defective switch.

Meanwhile, on dealer lots, GM’s redesigned pickups struggle to gain ground against aging models from Ford. One Wall Street analyst called it “arguably the least successful large pickup launch over the last 15 years.”

Amid disappointing sales, GM is ladling out incentives on most of its product line, reviving tactics that once helped push the company toward financial ruin. The return of profit-gutting incentives and the looming threat of lawsuits and fines over the switch issue suggest that the “new” GM is far from burying its past.

This article appeared on the website of Automotive News, a Detroit-based sister publication of Tire Business.

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