GM's Struggle to change its sturucture

I read an article about GM(General Motors)'s struggle to change the production structure. GM is a American company that provides converts or trucks. But now they try to focus on the small car market. GM's CEO announced that there will be plans to introduce a new line of compacts for North America, while also boosting passenger car production and closing four truck plants. Also he said GM will build the Chevrolet Volt electric car in 2010. It's because of the recent losses in the truck market. GM lost $3.25 billion in the first quarter of 2008, including special charges. Accordingly, management now suggests that they should downsize the production of trucks and more focus on the small fashionable cars.
Also, as the gas price goes up, there will be low consumption in the big cars like trucks. Accordingly, GM plans to introduce a new compact car that will be better equipped than today's compacts, with more amenities and also a 9-mpg boost over today's 27-mpg Chevrolet Cobalt. An all-new version of GM's Korean-made Chevy Aveo subcompact is coming. Also, they will close four truck plants. They said that "If the market is going away, there's no sense making the vehicles". In other words, it time to change.
Also, they plan to diversify their production to outside of the US. As the production costs go up and they felt needs to reduce costs by employing cheap labors. It seems so past, but to GM it's a recent innovation. Actually, they were proud of their location is mostly on US. But for survival, they have to break their rule. Also, now Americans don't prefer cars like trucks or converts. Many of customers recognize Japanese and Korean brands as the better small cars, that GM can offer competitive models. Accordingly, if GM will develop nice-looking small car, there will be harsh competitions betweem GM and asian companies. If GM cannot catch the market, they will someday bankrupt and find other businesses.
I think the case is well adapt to korean companies. Actually, past decades, Korean companies used low cost car strategies. But now customers want to find cars that have good design and also cheap price. Accordingly, korean company like Hyundai now try to develop very-low price car that has new age design. But I think there must be some high-quality cars in production mix of Hyundai. Because if they cannot produce these cars, their brand will be like a cheap image. Actually, Toyota, Japan's worldclass car company, used strategies like Hyundai do. But they realized the necessities of high-price, but high-quality car. And they developed the LEXUS. Now nobody thinks their image is cheap. I think it's a good model to Hyundai. Also, other korean companies should learn the lesson.

Author: David Welch
Title: GM: Small Is the New Big
Date: June 3, 2008, 12:27PM EST
Page: 1

reference: http://www.businessweek.com/lifestyle/content/jun2008/bw2008063_595262.htm
entry # 14 20700067