Six months ago, General Motors' U.S. inventories had surged to their highest point in a decade. After years of working to hold the line on incentives, and with industry sales on the decline after the longest period of growth in a century, GM looked to be in a tough spot.
Promises by several top executives that inventories would be back to a more normal level by year end appeared especially hollow after July brought little change, ominously leaving GM with a 104-day supply on Aug. 1. About 60 days is generally considered healthy.
The last time GM's number had been over 100 for at least two consecutive months was in early 2009, when the industry was mired in the darkest stretch of the recession.
But this time, GM execs insisted they had things under control. They attributed the surge to the introduction of several high-volume crossovers, not a misjudgment of the market or a failure to move quickly enough when production cuts were needed — two hallmarks of the old GM.
And you know what? They were right.
GM started 2018 with just a 63-day supply, its lowest level in two years, easily clearing its goal of about 70 days' worth. It managed to cut inventory by 41 days over the course of five months, including a 20-day drop in December alone, a pace made even more impressive by the fact that GM sales declined in three of those five months.
Forgive those of us familiar with GM's history of arrogantly overpromising and underdelivering — we'll sell 120,000 Chevy Volts next year! — for being skeptical. But these days, anyone who questions GM's resolve does so purely out of habit.
Under CEO Mary Barra, GM regularly does exactly what it said it would do. That might not sound very remarkable, but such discipline has often been hard to come by in Detroit. Even Wall Street is beginning to recognize this, pushing GM shares up nearly 30 percent since mid-2017.
Elon Musk could take a lesson from GM.
On the same day that GM showed that it had beaten its inventory goal, Musk yet again had to push back production targets for the Tesla Model 3.
Indeed, Musk fails to hit the goals and deadlines he sets for Tesla with a frequency that puts Old GM to shame. The CEO's credibility — something that will be more important each time Tesla needs more capital to fund his promises in the absence of profits — is fading quickly, at least outside of Tesla's unshakable cult of believers.
For everyone else, though, GM is the company that has offered far more reason to believe what it says.