Monday, May 09, 2005

Earth to GM

I've been following GM stock for a while now, and I occasionally came close to buying it, but a mix of social concerns about their contribution to SUV madness and financial worries about their sensitivity to rising oil costs kept me away. (I also tend to stay away from companies with gigantic debt.) Reading this story where they dismiss rumors that they're going to buy Toyota's hybrid-vehicle technology certainly didn't get me any more excited. I'm staying away from the stock, even with the 6.5% dividend, until I see them getting serious about hybrid vehicles.

They claim that they're only making cars the public wants. Maybe this is a ploy to sell more Chevy S-10 pickups -- you'll need a big truck to haul that much bullshit. The Japanese hybrids have been selling very well in this country, and the hybrid market would only grow larger if any significant chunk of GM's advertising budget were spent on them. (How big do you think the market for the Hummer is? And how many dozen times have you seen a Hummer ad? I think I've seen more Hummer ads than Hummers.) It's hard for me to figure out what GM is thinking here. Do they think that promoting and selling hybrids will make everyone more fuel-conscious and damage their beloved SUV market? Do they think oil will go back to $20/barrel? Are they afraid to expand a market where the Japanese have a head start? Are they just so used to selling gas guzzlers that they don't know how to do anything else?

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