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Monday, November 13, 2006

Detroit Ostrich Farm: GM Hybrid

GM will spend a lot of time and effort promoting its new hybrid technology. The problem is that cars built using the new tech won’t be out for a few years, if at all. GM has not decided if the technology will be available in production cars

It is also becoming increasingly unclear that people want hybrids now that gas prices are moving down. Also, hybrids cost about $3,000 more than their old-style gas counterparts.

For a company trying to save $9 billion a year to get its North American operations back into the black, the effort would not appear to be well-spent. It actually appears to be a distraction. The new Consumer Reports survey of car reliability shows that, of the 45 least reliable cars, twelve were from GM. No other car company even came close.

Maybe GM’s executives can forget the problems of their expenses, falling market share, poor quality ratings, and $9 billion-a-year cost cutting if they spend enough time talking about hybrids that they can’t sell yet to a market that may not want to buy them.

Douglas A. McIntyre can be reached at He does not own securities in companies that he writes about.

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