How to fix GM

GM is facing an imminent crisis. Millions of its cars are going into recall status, with issues ranging from minor things like the loose floor mats in the foot wells, to more drastic, potentially hazardous air bag ignition issues. With the millions of recalls now affecting GM, how do you fix it all, how do you fix GM? With the taste of "Government Motors" still in the mouths of some, GM already had a gargantuan task of reclaiming the light it had lost during the bailout, and was working diligently to show the American people that their investment was indeed a good one.

And they were actually making a lot of ground in showing that they were a worthy cause. Now, with a stream of recalls that doesn't seem to be stopping anytime soon, GM is struggling to endure the bad weather once again. With it being such a short amount of time since the bankruptcy and subsequent bailout, how can the company bounce back again and show the American people that they are still a great company?

How to fix GM

Easy: They don't have to. Somehow, in the midst of all this chaos and bad press, the people have lent their voices and their money to show that they still trust GM. Even with a lawsuit filed today that was seeking GM to pay $10 billion for the lost resale value of their cars, people are still confident in GM branded automobiles. Last month, GM posted sales so impressive that I had to do a spit take.

Here are the highlights according to GM's site.

§ The seasonally adjusted annual selling rate (SAAR) for light vehicles was an estimated 16.5 million units – the third consecutive month above 16 million.

§ Cruze was up 41 percent. Chevrolet Corvette deliveries were up 268 percent, Spark sales doubled, Camaro was up 30 percent and Impala was up 23 percent. Malibu retail sales were up 12 percent.

§ Retail sales of Chevrolet and GMC large SUVs doubled, while retail sales of the Chevrolet Equinox and GMC Terrain were up 16 percent and 13 percent, respectively.

§ Chevrolet Silverado and GMC Sierra sales were up for the third month in a row, with May deliveries up 8 percent and 14 percent, respectively.

§ At Cadillac, sales of the CTS sedan were up 39 percent and Escalade deliveries were up 30 percent. SRX sales were up 27 percent, for the vehicle line's best May ever.

§ Buick Encore deliveries more than doubled and Regal sales were up 49 percent.

§ GM's average transaction prices (ATPs), including full-size pickup ATPs, were in line with April. Calendar year to date, GM's ATPs are up about $2,700.

§ Incentive spending as a percentage of average transaction price was 10.4 percent, down 0.5 points from a year ago, according to J.D. Power PIN estimates. The industry average for May was 9.9 percent.

§ Commercial fleet sales were up 21 percent for the seventh consecutive monthly increase and the best month since September 2008. Within commercial fleet, full-size van sales were up 46 percent and full-size pickups were up 35 percent.

§ Small business deliveries, which are included in retail sales, were up 10 percent.

These figures are just staggering when you consider all the negative press. Upwards of 74 people died (that we know about) because of the negligence GM employees exhibited during the decade-long period they knew about the problem. But still GM sales are through the roof! When you consider the amount of GM cars on the road, that number is miniscule, and it probably wouldn't have been such a big issues if not for the cover up that occurred. But even with the known cover up, people are still buying GM cars, and they still have faith in the product.

Just look at the sales figures for the Cruze or Encore. The Cruze normally sells around 20k units a month; this last month that figure was up to around 30k. And the Encore is even crazier; this car usually sells in low numbers around the 3k unit mark, this last month it doubled to hit 6k. And unlike Ford, which makes most of its money through truck sales, GM's sales come from a variety of segments. They have a model that is killing in almost every segment. Things like the Corvette will probably come down after a period of time where it becomes easier to get the new Stingray, but with the introduction of the new Z06 coming in a few months, that number might stay that high for longer than anyone could predict.

The facts that GM continues to profit, and continues to post bigger and bigger sales gains are nothing short of staggering. It doesn't matter if the Treasury Department or any part of the government fines them. The $35 million that the Department of Transportation would be replaced in less than a day. While GM may not be paying its penance through its car sales, the cost of all these proactive recalls is surely quite a large number. In addition, GM is still embroiled in the litigious aspect of the ignition deaths which will likely constitute a much higher premium than the one imposed on it by the government.

But what's the bottom line? How has GM's brass weathered the shit storm they put themselves into? The answer is simple: Through brand recognition and owning their mistake. General Motors is still known as the biggest car company on the planet. It has the ability to move a mountain if it wants to and that's what GM is showing the public. GM is at a turning point right now, one that can either doom them, or make them stronger. These recalls have the potential to help spark changes within GM's brass and supply chain, which means GM will continue to thrive.

You can find me here on Twitter too!

Here's the link to GM sales figures.