Can General Motors sustain momentum towards profitability?
But analysts are wary. Eric Noble of The CarLab points out that, outside of its full-sized SUVs, none of GM's vehicles are top-notch. The automaker will lose half its income from its financial arm once the GMAC sale is completed. Finally, a union strike against GM's major parts supplier Delphi would have GM burning through savings within months if not sooner.
But the greatest threat to GM's recovery comes from rising gas prices. Inventory of its new large SUVs is beginning to increase as SUV demand softens. Frederick Henderson, vice-president and CFO of GM forsees a worse situation for the company if normally loyal truck owners migrate en masse to purchasing sedans.
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[Source: Business Week]
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