NEW YORK (TheStreet) -- I feel for General Motors (GM - Get Report) in this recall mess. Thanks to an overzealous legal system, in which the tiniest mistake gets punished by draconian lawsuits, GM is now recalling almost every single car ever made, in many cases for the flimsiest of reasons.
In the spirit of providing some cheer for the GM's beleaguered management team, I have a proposal for how GM could spin out one of its factories for a market cap of $400 billion, basically almost eight times its current $50-something billion market cap. Follow me on this one!
I got the idea from an article over the weekend, published in Dallas Morning News, which had a report from GM's large SUV factory. It's about the factory that produces GM's large SUVs with nameplates such as Tahoe, Suburban, Yukon and Escalade. A new model series just went into production in early 2014.
Here are the characteristics of this GM business unit, located in Texas:
-- 1,200 vehicles are produced per day, six days a week, sometimes seven days a week.
-- The factory is running at least 24x6 for 144 hours per week.
-- That's basically approaching 400,000 vehicles per year.
-- Yukon model sales growth was 136% in April and 42% in May.
-- Days on dealer lots are among the shortest of any car in the market today -- 10 days for Suburban and 17 days for Tahoe.
-- Most popular model starts at $63,000. A typical transaction price could be over $70,000.
Think about these numbers for a moment. A factory producing cars at essentially 100% capacity, sales growing deep into the double digit percentages, near-zero inventories.