For shareholders in General Motors (GM), March has been more bear than lion. The automaker's stock has consistently traded below $33 a share -- the price stipulated in its initial public offering last November.

Over the past month, GM shares have lost nearly 8% of their value. To be sure, some of the drop in value is related to events outside of GM's control: soaring fuel prices, instability in the Middle East and Japan's earthquake.

But there is likely one other source for the current spate of investor angst: Chief Executive Daniel Akerson. On more than one occasion, Akerson has expressed frustration that GM engineers aren't able to more quickly churn out fresh products -- something the automaker needs to do to keep pace with crosstown rival Ford Motor (F) and Asian automakers, including South Korea's Hyundai Motor.

'Like a Can of Diet Coke'

Akerson's discontent is driven by his perception that GM is no different from any other consumer-products company. Citing Coca-Cola (KO) as an example, Akerson recently told The Wall Street Journal that a GM car was just like the can of Diet Coke he was drinking during the interview.

"GM has to start acting like a consumer-driven -- not [an] engineering-driven -- company," Akerson said. "We sell a consumer product -- our can just costs $30,000."

To analysts (and no doubt GM employees who have been down this road before), Akerson's comments are dispiriting. Believing that cars are no different from beverages, neckties or nail polish is what caused GM's downfall and subsequent bankruptcy in 2009. It was the source of the company's bland product offerings in the 1990s, which eventually led the company to hire auto-design guru Bob Lutz in 2001 to turn things around.

Akerson isn't the first CEO of a Detroit automaker to make the same wrongheaded assumption. Jacques Nasser, who led Ford for nearly three years before being fired in 2001, sought to rearrange the Dearborn, Mich.-based company into autonomous consumer business groups. He also, as with GM in recent years, pushed out people who knew the car business and hired from outside the industry.

Nasser's belief was that Ford was a consumer-products company that happened to sell cars, says Arthur Wheaton, who analyzes the auto industry for Cornell University's school of industrial and labor relations. "It was a huge flop."

More in Common with Tech Companies

Car companies have more in common with technology companies, such as Apple (AAPL), a company that views innovation and engineering as key, Wheaton says. Unlike beverages or hand cream, automobiles are constantly evolving technologies. Just as you wouldn't hire someone whose expertise is in shampoo or razor blades to develop the next generation iPhone or iPad, it makes as little sense to expect the same people to develop new cars, trucks and utility vehicles.

By adhering to its principles, Apple hasn't only become an iconic brand known for innovation, its reputation has allowed the company to ask for and get a premium price for the products its sells, which raises another concern among GM shareholders.

In the months after GM exited bankruptcy in 2009, the revived automaker stuck to its guns by not deeply discounting cars to spur sales, instead relying on a formula that produced hefty profits from each vehicle sold. But the automaker has since backtracked in a bid to boost its share of the U.S. car market by offering generous incentives.

To be sure, rebates, and cheap financing and lease rates have helped GM move more vehicles off dealers' lots, as last month's sales figures showed. February sales surged 46%, exceeding analyst estimates as well as those of GM itself.

But analysts warn those sales come at a cost -- reduced trade-in values, as one example. "We don't see any upside to incentives," Eric Lyman of Automotive Lease Guide told MSNBC.com. "It is manipulating the market and lowering the cost of your vehicles, which lowers the resale value of your used vehicle in the market."

GM so far has done a remarkable job at turning itself around. With the two-year anniversary of its bankruptcy looming, however, it's unclear whether reshaping its identity and selling cars on the cheap can help the company stay on the road to recovery.


Increase your money and finance knowledge from home

Finding Stock Ideas

Learn to do your research and find investments.

View Course »

Behavioral Finance

Why do investors make the decisions that they do?

View Course »

Add a Comment

*0 / 3000 Character Maximum

1029 Comments

Filter by:
rudy

kadybug30,you are right, you are an idiot, who had the most recalls in2010, oh, I believe it was toyota. toyota paid someone in our gov. to cover up falty equiptment in toyotas junk. how many imports go on auction at barret-jackson? none because they were junk back then and they still are junk. Now let me tel you about the one world economy our elected officials want, its a lie, nafta only allows our wealthy poloticians friends to move their companys to foreign country for child, slave and prison labor and then send their product bact to our country with no tarrif and triple their profit margin. import autos are no different.

May 09 2011 at 8:52 AM Report abuse rate up rate down Reply
rudy

FOR ALL OF YOU UNaMERICANS THAT BOUGHT AN IMPORT YOU DIDN'T JUST HURT AMERICAN AUTO MANUFACTURES YOU ALSO HURT THE SMALL JOB SHOPS STATIONED AROUND
AMERICA AND THE SMALL TOWNS THAT RELIED ON THESE SHOPS. TAKE A RIDE THROUGH SMALL TOWNS IN AMERICA AND SEE THE RUN DOWN TOWNS THAT USED TO BE VIBRANT. NOW THE RESIDETS THERE ARE STRUGGLING TO KEEP THEIR HOMES AND PUT FOOD ON THEIR TABLES. SHAME ON YOU AND SHAME ON OUR POLITICIANS THAT HAVE ALLOWED NAFTA. BIG AMERICAN SCREW JOB.

April 01 2011 at 9:45 PM Report abuse +1 rate up rate down Reply
xlnx97

DON'T EVER BUY A GENERAL MOTORS PRODUCT UNTIL THEY MAKE RESTITUTION TO THE PEOPLE THAT BELIEVED IN THEM AND LOSSED A LOT OF MONEY WHEN THEY WENT BANKRUPT.
MY BITTER LOSS WILL FOREVER FORBID ME FROM ANYTHING TO DO WITH GENERAL MOTORS.

March 31 2011 at 10:31 PM Report abuse -1 rate up rate down Reply
2 replies to xlnx97's comment
Sam Diamond

Its your fault you didn't diversify, stop being a cry baby.

April 16 2011 at 7:59 PM Report abuse rate up rate down Reply
dandy77

did you have gms bonds?

April 28 2011 at 6:28 PM Report abuse rate up rate down Reply
harleydavid105

Saw in today's paper that Hyundai is ending it's " Buy a Hyundai and if you lose your job within a year we'll buy it back" program started in 2009. Kind of ironic since buying foreign made products is mostly the reason for unemployment in the USA.

March 31 2011 at 8:32 PM Report abuse +3 rate up rate down Reply
kadybug30

GM deserves to go under. Have they paid back the stimulus yet?
No more bailouts.
GM you have a substandard product, poor customer service and glaringly horrible management it's time for you to go! I have a 2005 Chevy it is a blistering POS! This car doesn't even have 70,000 miles on it and has been falling apart since 06!
The first year it was in the shop more than it was on the road (like an idiot I bought it new)! They either pull it together on their own or close shop!
Pathetic!

March 31 2011 at 6:15 AM Report abuse -2 rate up rate down Reply
1 reply to kadybug30's comment
harleydavid105

I have also owned 9 GM cars in my life. I currently own 4 GM cars. My 2007 Impala flex-fuel is a great car and I run only E-85 and the performance is better than on gasoline. Mileage is lower but so is the cost of E-85.

March 31 2011 at 7:03 PM Report abuse +1 rate up rate down Reply
barefoottrims

Oh the $49 billion bailout and $3200 bonuses didn't work?

March 31 2011 at 5:59 AM Report abuse -1 rate up rate down Reply
john&terry

The folks at GM better wake up ,nobody with any common sense will buy a Voit Ford has outsold them last year The economy is in trouble more so then before ,The civil wars in the mid-east Our troops and commitment in Libya will further a economic decline

March 31 2011 at 5:03 AM Report abuse rate up rate down Reply
pdmustgt

GM still hasn't learned from it's mistakes. Ford learned and is going forward price of the company trading shares isn't exactly indictor on how well they are doing.

March 31 2011 at 5:00 AM Report abuse rate up rate down Reply
WINNER

This is SILLY! Okay they based this story on GM because of their borrowed Gov. funds. Yet BOTH GM AND FORD shares have BOTH dropped OVER 10% recently. It has NOTHING to do with their cars. GM and FORD BOTH are making GREAT vehicles. Ford and GM sales have been up for the last 24 months. Their shares are falling right now due to oil and gas prices. Also the economy is scaring more consumers from buying cars (i dont blame them). But GM has already paid back a percentage of their loan AHEAD of schedule. Churning out great vehicles. I currently drive a Subaru but I have to say.. My next vehicle will either be a Chevrolet or Cadillac. I an liking what ford is doing too. But the GM line just looks more modern, also i love the idea of a 100K mile warranty, One of my co-workers has a 09' impala with a 100K mile warranty and hes ROUGH on cars. But hasnt had an issue since he bought it in 2008. So I believe that Detroit is on the right track. the Government just has to make the market more stable. Even im "iffy" about buying a new Tahoe right now.. so im waiting until the market stabilizes.

March 31 2011 at 4:07 AM Report abuse +2 rate up rate down Reply
1 reply to WINNER's comment
Scratpax

...Stick w/ your Subaru quality/engineering/customer service--you'll be miles ahead of GM's "up yours after we've got your sale" attitudes!!--(which I've had w/ them on ALL 3 of my new purchase GM blunders:77 camaro/1991 chevy van/2004 Saturn ion...NONE called me after the sale & all 3 "new" cars had mega problems!!):in contrast-- I've been called twice during the first month of Subaru ownership, & Subaru generously supports the environment/animal shelters/etc. while GM only WASTES it's PR dollars on flashy air-polluting/resource-wasting NASCRAP 200mph "billboards".......

April 01 2011 at 8:46 AM Report abuse rate up rate down Reply
Appaloosa

I think GM screwed up by killing Saturn and keeping the old lines. I never understood why Chevy, Pontiac, Buick and Oldsmobile ALL made the same car and called it different names. That was a massive waste of creative edge. General Motors has to get back to basics and hopefully resurrect Saturn and the creative genius of the process improvement that was employee led. Engineers are not the entire answer. Creative design lives a full happy life in the mind of a ten year old. If you do not believe me, watch them play and describe their visions. The job of the engineer is to make that vision a reality. Engineers are not that creative. The difference is they went to college to learn to use BOOKS to tell them the properties of materials and all. If GM wanted to make money, sell On Star to ALL maunfacturers. Otherwise, that system will be eclipsed by inovation and technology also and then it will be ho humm and worthless.

March 31 2011 at 3:02 AM Report abuse +3 rate up rate down Reply
1 reply to Appaloosa's comment
Scratpax

...In order (for the 7th time) to "buy American" in 2004, I bought a Saturn new "E-Z Sale for GM" w/ no trade on a 60 month loan--(against my consumer-reports reading sweetheart's prodding me to get a Toyota or Honda for better quality)--the dealer NEVER got back to me on a $12-$13 issue immed. after the sale (as he said he would!)--this, from the "caring car co. division" of GM--& that POS had fuel lines that leaked via becoming rusted through 2 months before pay-off--as well as electricals out/intermittant begining @ 60K miles (warning lights/cd-radio/pwr. windows-mirrors-locks)& trunk lid torsion bars snapping @ 80K)---the thanks I got for keeping the GM doo-wahs in Tenn. working vs. taking a NON-PAID-OFF publication's advice to "buy forgein" for best quality...Saturn now gone under??--couldn't happen to a better bunch of no-mind butt-holes!!!!...Now for the rest of GM to follow suit!.....

April 01 2011 at 9:01 AM Report abuse rate up rate down Reply