GM ignores reality, makes completely wrong decision

Many people are becoming more environmentally conscious in general and opting for smaller, more fuel-efficient vehicles. Even those who don’t care about the environment are watching the steady rise of gas prices and realizing that fuel efficiency is good for their wallet. As a result, SUV sales have been declining fairly consistently for the last two years.

Last year, GM lost over $10 billion due to its focus on SUVs and large trucks and disregard for compact cars and trucks. Investors got scared. GMAC, their financing arm, is weakened and about to be partially sold. Their credit rating has been dropping lately, and they’ve been given a negative outlook by investment firms.

So what does GM do to reassure its investors that things will be okay? How do they say “look, we know what’s causing the problems, and we’re going to correct it”? That’s right: by increasing production of its full-size SUVs, the same ones that they haven’t been able to sell for the past year. Good move, GM.

Meanwhile, sales of hybrids continue to climb at an astonishing rate. Ford has realized this; why hasn’t GM?