Overtaking Detroit

In the public's mind, Detroit is where Hyundai was a decade ago. Unfortunately, car companies headed in the wrong direction can't be turned on a dime. "It takes patient capital," says Martin Zimmerman, a professor at the University of Michigan's Stephen M. Ross School of Business.

For companies like Chrysler, patience and time are in short supply. Chrysler declined NEWSWEEK's request for an interview, and spokeswoman Jodi Tinson would say only that executives are currently working on "defining the strategy for the new company moving forward." But she also says that the company realizes that in order to be competitive once again, improving quality will be critical. And with its new partner, Fiat, Chrysler will need to send a clear message about its brand.

General Motors' strategy is what the experts are recommending: demonstrating continuous improvement year to year, which GM has already achieved with 13 models in the top three of its segments in the J.D. Power study, says Susan Docherty, vice president of Buick, Pontiac, and GMC. GM plans six new launches in the next three months. Still, Docherty admits that GM's reputation has taken a hit. This company "is capable of getting back to greatness," she says. "We're not walking around in fear of what Hyundai's doing."

But GM and the rest of Detroit should watch its back, says John Wolkonowicz, an automotive analyst for IHS Global Insight. "I'd be looking over my shoulder," he says. At this point, Detroit can't afford not to.

© 2009