What's Behind GM's Recovery Effort?

GM just submitted its recovery plan to Congress, part of the requirement made of the automaker by the federal government when the company received billions of dollars in taxpayer monies late last year. Already, a lot is being said about their plans which reveals that the company will need tens of billions of dollars over and beyond what has already been given to it, suggesting that a lot of work still needs to be done.

Behind the scenes there are some very real problems for GM which could scuttle its recovery efforts no matter how hard it tries to rebound or whether the Obama administration will still be willing to fund the company's operations. Read on and we'll take a look a what some of the key problems are and what must be done to right the sinking ship:

Brand Heavy – One thing GM is good at making is new brands. Or at least keeping around old brands that have long lost their usefulness. In the US, eight brands are represented with only two or three healthy enough. Cadillac and Chevrolet are doing fine while Buick and GMC are ailing. Pontiac is sick, Saturn has lost its way, Saab is on death's door while Hummer died last year but no one has buried the corpse.

Union Dependent – Unlike the foreign automakers who build cars in the US without a union workforce, GM is tied to the fortunes of its unions, money hungry rank and file members who have drained the life out of GM. Get rid of the unions and you get rid of a major source of irritation for GM.

Slow Change – Overall, I believe GM makes some very good products, but they are still saddled with a number of models which pale in comparison to what the competition offers. Cars like the Chevy Cobalt, Pontiac G3, Cadillac DTS and the GMC Colorado just don't measure up. GM says that these models will be updated and replaced, but they always seem to lag behind their competitors who stay ahead of the game.

Spread Out – What should be an asset for any automaker is that the company's operations are spread out all over the world. For a healthy company, this would be ideal but GM is anything but healthy. Expect dropping Chinese sales to continue to take a toll while GM tries to find a way to bolster its many foreign brands including Opel, Daewoo GM and Holden.

Stubborn Management – After losing tens of billions of dollars, you'd think GM's board would have replaced senior management, but they've stuck with them through thick and thin. At some point GM leadership needs to fall on its sword and let fresh faces take over. Sometimes all you need is a bit of reinvigoration to move forward.

Ultimately, President Obama will decide the fate of General Motors, as he works with a team of advisors tasked with making the company profitable. Bankruptcy is one option which is all the more attractive to taxpayers like me who fear we'd get stuck with an enormous bail out loan.