While the industry, media and consumers alike all have applauded GM for its re-engineered Chevrolet Silverado and GMC Sierra Heavy Duty pickups, yesterday's announcement of the addition of a third shift at GM’s Flint production plant makes us a bit uneasy. Many of the headlines make it appear that brand-new hires will produce these large vehicles in the third quarter, while in fact they are rehiring or reassigning existing GM production staff. Meanwhile, justification is made on the back of "predicted" growth in the housing and construction markets, which power sales of such vehicles based on their raw capability and utility rather than efficiency or style. However, we are concerned that GM may fall victim to the “siren's song” that drew this company into the rocks in the past, when it built a painful reliance on sales of such high-profit yet market-sensitive vehicles. Just this week, Kelley Blue Book’s kbb.com released consumer survey data that highlighted the current and projected impact of higher fuel prices on consumers, and nearly three-quarters (70 percent) of car shoppers said that gas prices have influenced vehicle consideration and almost half (43 percent) of car shoppers reported delaying the purchase of a vehicle due to economic concerns and expected rise in fuel prices. While we recognize that sales of heavy duty trucks are more often guided by necessity and investment, overall fuel efficiency is a factor that cannot be ignored when we see such a high level of impact on all consumers. We would never suggest that GM allow potential growth in this segment to fall into the also-capable hands of new heavy duty trucks from competitors like Ford and Ram, but we hope GM balances this rush for quick-hit profitability with continued investment in vehicles for which the company is not historically well known. Responsibly-sized vehicles like the Buick Regal and GMC Terrain, as well as high-impact technology which is found in the equally lauded Chevrolet Volt, are the fuel that will power this company in an assumed future of rising fuel economy standards and consumer price sensitivity.

I will never forget looking out my airplane window while on approach to Detroit's airport during the summer of 2008 and seeing rows of "high-profit" yet dusty and unwanted trucks and SUVs in overflow parking lots, waiting to be delivered to dealers already choking on inventory. GM needs to keep that vision in mind as it looks to capitalize on competitiveness in the heavy duty truck marketplace and growth in the small-business and construction markets, while also acting like "The New GM" that it continually claims to be.

- James Bell, executive market analyst, Kelley Blue Book’s kbb.com

**OEM/Vehicle News**

Ford truck plant to shut for week

http://www.freep.com/article/20110125/BUSINESS01/101250327/1210/Ford-truck-plant-to-shut-for-week

Lack of engines idles 3,000 Ford workers at Dearborn plant

http://www.detnews.com/article/20110125/AUTO01/101250325/1148/auto01/Lack-of-engines-idles-3-000-Ford-workers-at-Dearborn-plant

GM’s China sales pass U.S. for first time

http://www.freep.com/article/20110124/BUSINESS0101/110124024/1205/BUSINESS01/GMs-China-sales-pass-U.S.-for-first-time

GM’s China sales top U.S. total, a first for the automaker

http://www.latimes.com/business/autos/la-fi-autos-gm-20110125,0,5849923.story

Porsche Announces 2012 911 Black Edition

http://www.prnewswire.com/news-releases/porsche-announces-2012-911-black-edition-114534639.html