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Oct 5, 2005

Comments - USA - GM Takes Baby Steps

Professional investors say trying to time the market is a fool's game

New York,NY,USA -Forbes, by Tom Van Riper -5 Oct 2005: -- Apparently, General Motors agrees when it comes to the oil markets. It's moving with baby steps on a program of expensive redesigns for marginal improvements in fuel savings on its big sport utility vehicles, taking care not to alienate its traditional customers. They still love the lure of big, powerful cars and the engines behind them. GM is taking the view that what ails it are health care costs and lackluster interest in its car lineup, not some retaliation for the gas guzzling SUVs that have been their savior for the past decade and helped the automaker buffer its other problems... But basing long-term plans on short-term movements in gas prices can be perilous. Not only does factory retooling cost millions, but it can leave you stuck with the wrong product in the showroom a year or so down the road if prices fall back. When it comes to a major redesign--once you're in, you're in. The model won't be changed for the duration of that model year.

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