Generally Speaking

NOTE: This entry, originally posted on Thursday, May 12, was deleted in a Blogger blackout but I found it restored as a draft. So here it is again, five days later.

General Motors just announced a major expansion only two years after declaring bankruptcy. The company has announced a $2 billion investment to create or preserve four thousand jobs at seventeen different American plants.

What could have sparked such a turnaround? It's all about the product. The firm is betting on the success of their more energy-efficient models, such as the Chevrolet Cruze and the Chevrolet Volt electric car, which should do quite well with a populace having to deal with rising gas prices. GM's sales are already phenomenally up thanks in great part to their new products. Plus, the cars GM manufactures today are more engaging vehicles than the dull-as-dishwater cars GM was forcing on us in previous decades. They then should have been called Generic Motors.

So are right-wingers ready to give President Obama credit for saving the company and thousands of jobs? Not on your life. Peter Flaherty of the conservative National Legal and Policy Center sneers at recent slumps in GM's stock price, arguing that the initial public offering of $33 a share, more recently selling below $30, would have to hit $53 per stock to recoup taxpayer funds - but the sluggish stock price is predictable in a volatile market. Writing for the same right-wing group, Matt Modica bitches about the excessive spending GM undertook to retool and re-orient itself. "GM went bankrupt, took over $50 billion of taxpayer money, and then went on a spending spree before taxpayers were paid back," Modica wrote. "This hardly seems like cause to rejoice."

Uh, Matt, have you actually read any road test reviews? Maybe if you did, you'd see the result of all that spending.

GM stock has admittedly been underperforming of late, and the Web site MoneyShow.com had recommended to investors to buy stock in parts suppliers rather than in General Motors. When GM stock declined 6 percent after its IPO, the advice seemed vindicated. But MoneyShow.com's George Putnam has announced that his site is ready to recommend GM stock. Why? I'll let Putnam explain it:

"GM’s new management team has brought a level of discipline to the company that it hasn't had in decades. Operations are now leaner, and finances are better managed than they have been in at least a couple of generations.

"The company’s product line appears to be experiencing good success both domestically and abroad. Its new models in the U.S. have been well received, and it has others in the pipeline."

So - there!

I saw the GM displays at the 2011 New York auto show, and, while I obviously couldn't test-drive any of the cars, I came away impressed with the fit and finish and the quality of the interior materials. Getting into a Chevrolet Cruze was like getting into an Opel Astra.

This wonderful turnaround comes, ironically, upon the news of the passing of former GM chairman Robert Stempel. Stempel, who had the misfortune of taking over General Motors from Roger Smith in 1990 and was left holding the bag when GM went into a free fall soon thereafter (he was tossed out after only two years), was a real "car guy." The New Jersey-born Stempel was a gifted engineer who helped develop the Oldsmobile Toronado, GM's first front-wheel-drive vehicle, and he was instrumental in designing the catalytic converter. He was at Pontiac when work began on the Fiero, and he oversaw the design of the sixth-generation Kadett at Opel. He was also a strong supporter of electric vehicles, and he approved the General Motors EV1 project that was later canceled in a cavalier (no pun intended) fashion by a since-humbled company. Had Stempel been allowed to stay longer, GM's fortunes in the sixteen years between his ouster and the 2008 financial crisis might have been very different.