Perhaps the folks at General Motors have finally started to waken from their slumber or perhaps they have simply been reading the Phalanx, whatever the cause, GM is finally beginning to take steps that will move the firm back to profitability. Yesterday the world’s largest automaker announced the introduction of a new expansive warranty program. The warranty for 2007 vehicles has been expanded from 36,000 miles to 100,000 miles.

This move is essential if GM hopes to complete its turnaround. What GM and the other Big Three should and must do is convince potential customers that it builds quality vehicles. This warranty should be only the beginning and if GM is to convince its customer base that it is committed to quality, these warranties should be made permanent, not a temporary gimmick to get customers in the door like employee pricing.

In addition to addressing issues of quality, the automaker must take a lesson from its Japanese rivals and market products that consumers are actually interested in purchasing.

GM (and the rest of the Big Three) must also focus on addressing issues that have led to high costs of production, particularly its labor costs, which limit the company’s flexibility in a competitive market.
Link to Boston Globe article