WashPost
Tuesday, June 1, 2010
We don't need an aircraft carrier and "Mission Accomplished" banner, but isn't it time to agree that the auto rescue has been a success? A year after the government-sponsored bankruptcies of GM and Chrysler, both patients are alive and progressing well toward recovery.
Two weeks ago, GM reported its first quarterly profit in nearly three years: net income of $865 million on $31.5 billion in sales. A month earlier, Chrysler's first-quarter report included the news that the company had turned cash-flow positive after nearly bleeding to death in 2008.
Both companies are also doing better in the marketplace. Market-share declines have been arrested. Bloated inventories on dealers' lots have been reduced dramatically. Use of sales incentives such as rebates and interest-free financing -- the cocaine of the auto industry -- has been substantially reduced.
And the prices that the cars are fetching have risen sharply since last year: by $2,500 for GM and $2,400 for Chrysler. That means that the companies' historically poor images -- brand equity, in industry parlance -- have begun to improve.
(More here.)
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