Tuesday, June 02, 2009

General Motors and Team Obama

GM is dead. Long Live GM. Uncle Sam is there to give you back life. Will the new GM work? Can a broken vase be put back together?

No one provides a better answer to the GM question by the normally conservative NY Times columnist David Brooks. His analysis is here.

The following rejoinder by a reader makes a good companion piece to Brooks' analysis:

David, your thinking is sound, but missing an historical context that would actually reinforce it.

There are two books that completely explain what GM was, is, and will become:

1. "My Years With General Motors" by Alfred Sloan

2. "Concept of the Corporation" by Peter Drucker

The first is by the quintessential GM insider. Sloan was chairman of GM during its formative years - and pioneered the ostensible virtue that proved to be GM (and other American) companies' demise. That is, of course, centralized finance and decentralized operations.

GM has always been run by its finance people. Recently, run into the ground. This is perhaps why Barack's team is so deceptively comfortable at its helm.

Everything by the numbers. The Corvair. The Vega. The Aztek. More harmfully, a succession of mediocre models.

The second is by the quintessential GM outsider - and about GM from an outsider's perspective. The poignancy here goes to the other fatal aspect of GM's culture - its insularity.

As Drucker wrote his book, GM's senior executive management grew so comfortable with him, they wanted to offer him a senior executive job. Upon reading the book, however, that thought dissipated. They had grown to see Peter as an insider - and so his outsider's view was seen as disloyal and even seditious. So Drucker brought his lessens elsewhere. To Japan.

Santayana's comment (incidentally, Barack, a Harvard man through and through) about those not remembering the past being doomed to repeat is eerily poignant here.

Lutz, from Chrysler - the engineering-oriented company of the big three - couldn't make a significant dent (pun intended) in GM's culture.

But our new young president might just get it right - and I certainly wish him and his team well to that end - and learn a valuable lesson in wealth creation.

GM's challenge is not creating a supply of cars. It is about creating demand.

For that - he needs to turn to the marketing-oriented company of the big three.

I see a Ford in GM's future. You heard it here first.

— W in the Middle, New York State

1 comment:

jaderdavila said...

the chinese is patiently awaiting
for the judge to declare bankruptcy
then he'll come
and buy the three for peanuts