What to do with a few extra billion dollars?
With all the decisions General Motors is facing these days (and there are a number of them), this could be the biggest.
The auto maker is mulling a plan to sell a controlling stake in its now wholly owned finance arm, General Motors Acceptance Corp. Analysts say as much as $10 billion-$15 billion could be raised. How GM invests that potential revenue may mean the difference between barely surviving and a total rebirth.
There certainly are many paths GM could choose, from using the cash simply to fund ongoing operations, which have been running in the red throughout 2005, to backing retirement programs aimed at reducing its bloated workforce.
Some of it could wind up in the form of a special dividend designed to keep potentially activist investors such as Kirk Kerkorian at bay or be used to pump up the company's pension reserves.
The money may go to settle the tab for bankrupt supplier Delphi, which could stick the auto maker with a multi-billion-dollar bill related to retirement costs for hourly workers who once belonged to GM.
Too bad, because none of that will restore the company to long-term health.
What GM needs is a space-shot-like approach to product development designed to knock its competitors back on their heels.
Without a doubt, the auto maker is beginning to fill out its lineup with more competitive cars and trucks, including a planned doubling of its offerings in the industry's hottest segment — cross/utility vehicles.
It also is revamping its large pickups and SUVs, getting closer to launching hybrid-electric vehicles and backing its powertrain lineup with new 6-speed automatic transmissions.
But all that is merely playing catch-up to the industry's leaders.
This could be GM's best chance in decades at a total rebirth, and for once, it needs to go on the offensive, forcing others to chase.
Some of that $10 billion-plus could be used to leapfrog the competition with the next big thing after the CUV boom goes bust (really innovative, stylish, feature-packed small cars, for example), or to get out front in the fuel efficiency race with breakthrough gasoline and diesel engine technology or fuel cells.
How about an all-out effort to create mainstream sedans and derivatives for its volume brands that simply blow the competition away, using some of that money to buy market share? Think BMW 3-Series at Chevy Malibu prices.
It could stand to spend a bit on innovative marketing, long-term warranties and extended service plans to convince wary new customers to take a chance on the new, improved GM.
One thing is certain, the auto maker can't afford to sock this money away for a rainy day. It's pouring right now, and it's time for CEO Rick Wagoner and his team to take their best shot — whatever that may be.
Spending the cash wisely and with a long-term view just might mean the difference between barely surviving and emerging as an industry leader once again.
David Zoia is editorial director of WardsAuto.com