GM, the Teflon Company Run by a Safety-Loving Mom
DETROIT ( TheStreet) -- GM
But on Tuesday, GM announced surprisingly strong June sales results. Sales rose 1%, despite forecasts that they would show a decline in the mid-single digits. This occurred even as sales of the Cruze, GM's most popular car and second most popular vehicle after the Silverado, were halted on June 26 because of a potential air bag defect.
GM shares rose 2.8% to $37.33 on Tuesday.
The success of GM's redesigned full-sized SUVs "is driving up GM's average transaction price even as overall sales grow," said Kelley Blue Book analyst Karl Brauer, in a prepared statement. "The result is a GM at pre-recession health levels, recalls be damned."
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Is GM now a Teflon company, loved by consumers despite what the news reports say? That seems hard to believe, given that not long ago the specter of "Government Motors," bailed out by the federal government, was a staple talking point for the Obama haters. But that was seemingly forgotten on Tuesday.
Perhaps this is simply a case in which a rising tide lifts all boats. Overall, 2014 GM sales are up 2.5% through June while industry sales were up 5% through May. But GM has some bigger winners. Year to date, Chevrolet's small cars -- Cruze, Spark, and Sonic -- gained a combined 11% to 218,027 sales. Buick sales rose 12.5% to 113,472 units.
It's hard to say exactly what impact GM CEO Mary Barra has had. She became the first woman to head a major automaker in January. Weeks later, GM's image seemed to start to collapse around her. She made several appearances before Congress, which excels at outrage. That affords any CEO no chance to do well or badly; CEOs typically just sit there and take it.
Perhaps the most noteworthy recent Barra story has been the controversy last week over whether Matt Lauer should have asked her whether it is possible to run a major automaker and be a good mom at the same time. She said yes, it is possible.
If that is the biggest recent story, perhaps it offers a demonstration that consumers don't care much about recalls. After all, recalls can be taken as a sign that a company is being extra safe, and that Barra is a mom for safety. In a sense, she channels Mothers Against Drunk Driving.