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GM: How Best To 'Rev Up' Its Bottom Line

Wednesday, 26 Sep 2007 | 3:17 PM ET
2007 GMC Acadia
Source: gmc.com
2007 GMC Acadia

Just a few hours after I reported the new contractbetween GM and the UAW, I started hearing this question: "Can GM really boost its bottom line now that its costs have been lowered?" My gut says it can do it, IF the company builds on the improvement of its products in the last couple of years.

For GM to boost earnings, it has to sell more cars, trucks, and SUV's, or at least sell as many at a higher profit margin. That means coming up with a steady supply of winners like the GMC Acadia which is one of the fastest selling sport UTE's right now. The automaker also needs new models like the revamped Chevy Impala or Cadillac CTS to sell well. The jury is out on both of those.

GM also has to break through with better marketing. Aside from the Led Zeppelin Cadillac campaign a few years ago, GM has failed to capture the attention of buyers. I don't think using John Mellencamp's "My Country" for Chevy trucks has worked, nor has the Hummer campaigns, and somebody tell me what's the message from Saturn, Saab, Pontiac, and Buick.

GM has to figure out how to get our attention: either with cars and trucks that are game changers or with marketing that goes beyond fairly mundane campaigns. If that happens, GM, with its lower costs will accelerate its earnings in North America.

Behind the Deal
The winners and losers in today's auto agreement, with Peter Schiff, Euro Pacific Capital Inc. president; Stephen Moore, Wall Street Journal editorial board; CNBC's Phil Lebeau, Scott Cohn & Dylan Ratigan

Questions? Comments? BehindTheWheel@cnbc.com

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  • Phil LeBeau is a CNBC auto and airline industry reporter based in the Chicago bureau and editor of the Behind the Wheel section on CNBC.com.

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