Product-wise, GM is a little like a movie studio that hasn't produced a
blockbuster in better than 20 years, or the oil company that hasn't
tapped a gusher in a couple of decades. Even the United Auto Workers
took a shot at the uninspired products GM asks it to build.

So Wagoner asked vice chairman Robert Lutz to sketch out GM's plans for
the future.
Lutz, in reply to the needling from Davis, who suggested he might be
"too old" for the task of fixing GM's product offerings, insisted GM
was already pushing ahead with bold plans for major changes in the
company's model line.

"We see a huge opportunity here for us to capture the essence of the
American automobile in its glory days. The Japanese can't follow us
there any more than they could follow Harley-Davidson. We believe there
is a lot of gold in those hills and we intend to mine it," said Lutz.

However, Lutz acknowledged, grudgingly, that Ford and Chrysler had
already beaten GM to the space with the new Mustang and the 300C and
new Charger.

Lutz also said GM was adapting to the idea it is not only in the
transportation business but also the "arts and entertainment" business.
"You can't run the business by the left-side analytical part of your
brain. You've got to have a lot of the right-side creativity. We are in
the art and entertainment business. In the next two or three years,
you're going to see product that takes a back seat to nobody," Lutz
added.

Product is king, belatedly
"We do not see this issue being fixed by cutting costs alone. We know
we have to work on the revenue side," added Wagoner as he sketched out
GM's turnaround plan.

"If we had a chance to rerun the last five years," Wagoner later told
reporters, "we probably would have done a little more thinking about
making sure that each product was distinctive and had a chance to be
successful. There probably would have been a little less expansion of
the model line. We also didn't build brands in the way we wanted to
over the long term," Wagoner said.

Gerald Meyers, the former chief executive of the American Motors Corp.
and University of Michigan business school, told The Washington Post
that fixing product development remains one of GM's most important
challenges, as the lukewarm reception to the company's newest vehicles
such as the Buick LaCrosse suggests.

"That's the big gorilla sitting in the corner of the room," said
Meyers. "Just look at the Aztek; it was hokey, nonsensical, ugly. There
are not enough adjectives to describe that vehicle. It...was indicative
of the failed product development system that has been nurtured over
there for so long," Meyers added.

Meanwhile, Wagoner said during the annual meeting GM is devoting more
resources to product development. GM expects to spend about $1 billion
more annually on product development going forward, he said.

Wagoner, however, also cautioned the company's fortunes also will
depend on the future strength of the U.S. economy. The steady growth of
the U.S. economy during the 1990s was critical to GM's recovery after
the company nearly went bankrupt back in 1992. "If the U.S. market
booms, if gas prices go down, if sales of large SUVs come back, our
return to profitability will be quicker. If the U.S. enters a downturn
or gas prices go much higher and there are other outside factors that
we have to react to, it's going to be a tougher task," Wagoner said.
--

I think GM has finally, finally gotten it... now let's see 'em build a
new Camaro!

Patrick
'93 Cobra