What GM’s Progress Report Doesn't Say

General Motors has some genuine good news. The automaker's June 1 bankruptcy filing hasn't been nearly as ruinous as GM executives once feared. New vehicles like the Chevrolet Camaro, Cadillac SRX, and Buick LaCrosse are wowing reviewers and drawing buyers. The Chevy Volt, an electric plug-in that could help move the car industry away from gas-powered engines, remains on track for launch late in 2010. Fewer dealers and a streamlined workforce are finally bringing GM's size in line with its customer base.

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But unlike its rival Toyota, GM has a long history of exaggerating its virtues and denying its liabilities. Since GM is now a privately owned company, CEO Fritz Henderson's recent briefing on GM's progress offered useful insight into the company now 60 percent-owned by American taxpayers. But there's more to the story. Here are a few important things Henderson didn't mention:

The competition is getting tougher. While GM and Chrysler have been busy restructuring, competitors have taken advantage of the turmoil to woo their customers and increase market share. Ford and Hyundai appear to have benefited the most from their rivals' woes. GM's U.S. market share so far in 2009 is 19.7 percent, according to J.D. Power & Associates. That's nearly 3 percentage points lower than at the same point in 2008. Ford's market share, meanwhile, has risen by 1 point, and Hyundai's is up by more than 2 points. Both companies are aggressively rolling out new vehicles, and they're not about to give back hard-won market share just because GM gets all four wheels back on the pavement. Toyota, meanwhile, has had a terrible year—but still held its U.S. market share steady. And like GM, Toyota is revamping itself for leaner times.

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GM's forecasts are still optimistic. Henderson is hopeful that GM's market share will increase, but there's a good chance it will go the opposite direction. The four brands GM is getting rid of—Saab, Saturn, Hummer and Pontiac—still have a combined U.S. market share of about 3 percent. Once they're out of GM's portfolio, there's no guarantee that those buyers will shift over to other GM brands; they could buy Fords or Hyundais instead. And fewer dealers means GM may have a harder time reaching some customers. GM's hope is that new models like the LaCrosse, Chevy Equinox, GMC Terrain, Chevy Traverse, and GMC Acadia will make up the difference. Others doubt they will. Forecasting firm CSM Worldwide predicts that GM's market share will drift down to about 18 percent in 2011 and stay there through 2015. That's not what GM wants to hear.

GM still has some duds. Company execs are right when they point out the quality improvements in new GM models, but there are still a few dogs weighing down the whole lineup. You won't hear anybody at GM bragging about the Chevy Aveo, Cobalt, HHR, or Impala, largely relegated to rental fleets. The Buick LaCrosse might be a fresh hit, but the aging Buick Lucerne, not so much. (Good luck remembering which is hot and which is not.) And the Cadillac STS barely rates a mention where it competes, against the middle range of the BMW, Mercedes, and Lexus lineups. GM has plans to replace most of these middling legacy vehicles, but the replacements will have to prove themselves, and that takes time. Reliability is still a GM weakness and nobody's going to automatically assume that new models are better than the weak ones they're replacing.

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Taxpayers probably won't get all their money back. GM is hoping to have an initial public offering next year, selling stock to the public in order to pay back the $51 billion in bailout money that has kept GM alive. That would clearly be a sign that GM has recovered—but the odds that taxpayers will get back all their money are low. The Ethisphere Institute, a private research group that studies corporate responsibility, recently calculated that to fully pay back the government, GM would have to achieve a market value of $80 billion. That would be 43 percent higher than GM's value in 2000, when the automaker was highly profitable and much larger. Ethisphere estimates that a much smaller GM will only be able to pay back about $20 billion, or 40 percent of its bailout money. GM argues that its implied market value, taking into account its bond prices and other factors, will allow a higher repayment, closer to $34 billion. Maybe we should all start shilling for GM.