They most certainly have had their ups and downs, but 2013 looks to be the comeback year for General Motors.  With their stock trading near a 52-week high, their bond rating just increased to investment grade by Moody’s, and 4 of their brands rated by J.D. Power as “The Most Dependable”, GM seems to be on the mend.

Tracing its roots to 1908, General Motors started as a holding company for Buick.  In less than two years, GM merged or acquired 8 brands including Oldsmobile, Chevrolet, Pontiac, Cadillac, Elmore, Oakland, Reliance Motor Truck Company, and Rapid Motor Vehicle (predecessor to GMC Trucks).   The company ran into its first experience with leverage in 1910 when then founder, and majority owner, William Durant lost control of the company to a bankers’ trust due to the overly aggressive, rapid expansion and acquisition spree.  Durant would later take control again of GM in 1916, this time for good.  GM would experience stratospheric growth until the early 1980s when new cracks in its armor would begin to appear.

For years GM had operated with hubris…an extreme arrogance coupled with the Company’s inability to realistically understand its own competence.  Build it and they will come was the motto.  This led to poor quality, cheap and unreliable components, and total disregard for consumer preferences.  GM actually pioneered many of today’s most popular in-vehicle features but was unable to follow through.  The 1955 Chevy was the first documented car that offered cup holders, but it took nearly 30 years for a different car company to make them standard and popular.  That car company was Chrysler and the vehicle was the Chrysler minivan.  GM was the first to manufacture a mass-produced electric vehicle in 1990, the EV1, and also is recognized as the inventor of air bag safety systems in our vehicles today.

Watching GM from the mid 1980s through the early 2000s was like watching a company in suspended animation.  They produced vehicles that were average at best, offered mediocre quality, and still had not paid much attention to the interior features of its cars.  The Japanese and German automakers fine-tuned their cars offering better sound proofing to eliminate road noise, higher-end textures inside the cabins to make the vehicles more comfortable, and new exterior designs offering new looks every few years versus the seven years it took for General Motors to make exterior changes.

GM’s disregard for what the buyer wanted finally caught up to them in their 2009 bankruptcy filing at the height of the Great Recession.  Public opinion ran in extremes during this time.  The topic of a GM bailout was viewed as black or white.  You were either in favor or not…no in between.  Ultimately the U.S. government propped up General Motors with $50 billion dollars, of which half has been repaid.  The remaining balance – about 200 million shares will be sold off in traunches by the U.S. government.  To break even the stock will need to trade north of $70 per share as of today.  As so sticks the name “Government Motors”.

That brings us to GM’s comeback.  While a $70 dollar share price is still very aggressive in the near term there are promising signs that GM may have found its swagger.  They’ve unloaded their unprofitable brands including Oldsmobile, Pontiac, Saab, and Hummer.  They have poured millions into Chevy and Cadillac and so far the results have been impressive.  The new 2013 Cadillac XTS won an Edmonds “best car of the year” category while the ATS won the North American Car of the Year award.  GM’s 4 remaining brands can be found in J.D. Powers top 10 list of most dependable vehicles.  From styling and quality, to sales and service, General Motors seems to be coming back from the dead, and that’s a great thing.  Putting aside the politics of the bailout, the fact is we should all be cheering them on.  After all it’s our money.  It’s quite possible we are witnessing one of the greatest comebacks in the history of corporate America, and if that’s the case, we’re all the better for it.