A fresh start for GM

The once-mighty General Motors began a new era this week, after a federal judge, acting with unprecedented speed, gave final approval to the 100-year-old automaker’s bankruptcy restructuring plan. Just 40 days after GM’s bankruptcy filing, the court approved the plan that turns GM into a joint operation of the U.S. and Canadian governments, a United Auto Workers’ health-care fund, and secured creditors. The company starts its new incarnation with a radically slimmed-down product lineup and dealer network, and free of the debt load that had crippled its profitability. “We will make the customer the center of everything,” said CEO Fritz Henderson.

For U.S. taxpayers to recoup the $50 billion that they have poured into the company, GM stock would have to reach unprecedented heights. And GM is facing an anemic market for auto sales due to the recession. But its muscular new Chevrolet Camaro is selling briskly, and its hotly anticipated gas-electric Chevy Volt hybrid is due in showrooms next year.

The new GM actually has decent prospects, said Paul Ingrassia in The Wall Street Journal. A key test is whether it can make a profitable, high-mileage small car at its plant in Orion Township, Mich.—building it there is “a politically convenient move that will appease Congress and the UAW.” But GM must also resist “the many pressures that inevitably accompany government money.”

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Good luck with that, said Nolan Finley in the Detroit News. GM formerly “operated as if it were a government bureaucracy”; now it’s supposed to turn entrepreneurial under government ownership? “It ain’t gonna happen.” President Obama says he doesn’t want to run GM. But he’s sure to pressure it to concentrate on tiny green cars, even though pickups and SUVs are where the profits are.

Even if GM makes the right cars, can it sell them? asked Jerry Flint in Forbes.com. The company has a not-entirely deserved reputation for making low-quality vehicles, and now it has lost the trust of the car-buying public. It will be tough to win it back “when nameplates are killed, dealers axed, and the streets filled with unhappy workers and retirees.”