I know I [once again] risk the wrath of those who view me as GM's bête noir (I prefer to think of myself as an enfant terrible, but I'm way too old for that action). Even so, the news [via Reuters] that The General is upping the warranty on its Certified Pre-Owned (CPO) vehicles– from 3 months/3k miles miles to 12 months/12k miles– should be seen in context. It comes on the same day that GM announced it's pulling back on Buick, Pontiac and GMC leasing. Pulling back as in no longer offering leasing on any of the brands' models save the Pontiac G6 (go figure, fleet fans). With more brands to follow (suffer the little Cadillacs). Folks, it's all about the residuals– and I don't mean the customer's residual values. I'm talking about the multi-billion dollar hammering GM's taking on lease returns. And so is GM spokesman John McDonald, to The Detroit Free Press. "Leases, for a long time, have been supported at below-market rates. We're not able to financially support leases at below-market rates when the residuals have eroded as much as they have." So the CPO deal and the leasing no deal are designed to put a tourniquet on GM's self-inflicted wounds of lousy products, weak brands, the wrong products, chronic over-production, fleet sales and, I think that's it. Who can remember any more?
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